Juggernaut Satellite Corporation earned $ 10 million for the fiscal year ending yesterday. The firm also paid

Question:

Juggernaut Satellite Corporation earned $ 10 million for the fiscal year ending yesterday. The firm also paid out 20% of its earnings as dividends yesterday. The firm will continue to pay out 20% of its earnings as annual, end-of year dividends. The remaining 80 percent of earnings is retained by the company for use in projects. The company has 2 million shares of common stock outstanding. The current stock price is $85. The historical return on equity (ROE) of 16 percent is expected to continue in the future.

What is the required rate of return on the stock?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...