14. Laurel Enterprises expects earnings next year of $4 per share and has a 40% retention rate,...
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14. Laurel Enterprises expects earnings next year of $4 per share and has a 40% retention rate, which it plans to keep constant. Its equity cost of capital is 10%, which is also its expected return on new investment. Its earnings are expected to grow forever at a rate of 4% per year. If its next dividend is due in one year, what do you estimate the firm's current stock price to be?
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781292018409
3rd Global Edition
Authors: Berk, Peter DeMarzo, Jarrad Harford
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