Dalton Inc has an 11 5 percent return on equity and retains 55 percent of its earnings for reinvestment purposes It recently paid a dividend of $ 3 25 and the stock is currently selling for $ 40 a What is the growth rate for Dalton Inc b What is the expected return for Daltons stock c If you requir...

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Dalton Inc. has an 11.5 percent return on equity and retains 55 percent of its earnings for

Question:

Dalton Inc. has an 11.5 percent return on equity and retains 55 percent of its earnings for reinvestment purposes. It recently paid a of $ 3.25 and the stock is currently selling for $ 40.
a. What is the growth rate for Dalton Inc.?
b. What is the for Dalton’s stock?
c. If you require a 13 percent return, should you invest in the firm?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...