ECON 2560 Study Guide - Quiz Guide: Dividend Discount Model, Weighted Arithmetic Mean, Agrium

• School: University of Guelph
• Department: Economics
• Course: ECON 2560
• Professor: Bowr Nancy

Document Summary

Due to the three different (cid:373)ethods of (cid:272)al(cid:272)ulati(cid:374)g the (cid:272)o(cid:373)pa(cid:374)y"s (cid:449)eighted a(cid:448)erage (cid:272)ost of capital, we are provided with three results that provide three unique financial landscapes of. Looking at these three weighted-average cost of capital results in contrast with one another, along with the three growth rates calculated, we can gain a detailed look into the (cid:272)o(cid:373)pa(cid:374)y"s fi(cid:374)a(cid:374)(cid:272)ial future. While the stock price is not quite as high as it was in early 2015 (around /share versus. /share now), agriu(cid:373)"s sto(cid:272)k is perfor(cid:373)i(cid:374)g stro(cid:374)ger (cid:374)o(cid:449) tha(cid:374) it was in mid-2016 or prior to the spike in q1 of 2015. Additionally, the dividends paid throughout the last few years have steadily been growing, albeit a tad slower in recent quarters. Healthy net income and steady returns on equity have supported the growth rates that were discovered in the analysis. Capital-asset pricing model: r = 17. 68% r = 8. 43% r = 3. 82%