Question
XYZ Inc. has expected earnings over the next year of $3/share (E1 = 3). The company is expected to maintain an earnings retention rate of
XYZ Inc. has expected earnings over the next year of $3/share (E1 = 3). The company is expected to maintain an earnings retention rate of 20%, i.e., 80% of earnings are expected to be paid out as dividends every year. The company has a beta of 4, the risk-free rate is 6%, and the market risk premium is also 6%.
If the ROE is expected to be 25% in perpetuity
What is the implied growth rate?
What is the value of the stock?
What is the present value of growth opportunities?
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Here Return on Equity 25 Retention Ratio 20 1 Using the Formula of Growth Rate The growth rate ...
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Applied Regression Analysis And Other Multivariable Methods
Authors: David G. Kleinbaum, Lawrence L. Kupper, Azhar Nizam, Eli S. Rosenberg
5th Edition
1285051084, 978-1285963754, 128596375X, 978-1285051086
