1. Help Jenny to forecast dividend payments for Reeby Sports and to estimate the value of the...

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1. Help Jenny to forecast dividend payments for Reeby Sports and to estimate the value of the stock. Of course, you will have to make some simplifying assumptions. For example, you could assume a ROE of 15% at least for the first six years, and a dividend payout ratio of 30%.

Those assumptions will drive growth in assets, earnings, and dividends. What happens if ROE falls to 10% after six years?

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Principles Of Corporate Finance

ISBN: 9781264080946

14th Edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans

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