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2. XYZ Company is expecting its return on equity to equal 25% and expects to pay 46% of profits as dividends. Its next year dividends
2. XYZ Company is expecting its return on equity to equal 25% and expects to pay 46% of profits as dividends. Its next year dividends are $2.00, and the investors require 15% return.
a) What is XYZs expected growth rate?
b) What is XYZs intrinsic value?
c) If its market price is $73.50, would you invest in XYZ stock?
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