FIN622 - Corporate Finance GDB#2

The stock price of AST Company is Rs. 15. The Company has just calculated its WACC as 12.38%. By using this information, answer the following questions:
(i) What should the company do in order to maintain its stock price at Rs. 15?

(ii) What should the company do if it wants its stock price to go higher?

ANSWER.

1.Ast company need to maintain their stock price at Rs.15, so they should have to earn a return 12.38% of its debts and quity holders.

2.if Ast company need to go heigher of its stock price so he must need to increase the return rate (12.38%).