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25 Company ABC forecasts to have a earning per share of $8 next year. If the company distributes all its earnings to shareholders as dividends,
25 Company ABC forecasts to have a earning per share of $8 next year. If the company distributes all its earnings to shareholders as dividends, it will provide investors with a 10% expected return. Instead, company ABC decides to plowback 35% of the earnings at the firm's current return on equity of 20%. What is the value of the stock before and after the plowback decision? Shall your calculation steps. If you use the financial calculator, tell me your inputs and output (i.e. pv,fv,n, i/Y, pmt)
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