Question
A company currently has earnings (E0) of $1.25 and a dividend (D0) of $0.20. The firms current return on equity (ROE) is 20%. The firm
A company currently has earnings (E0) of $1.25 and a dividend (D0) of $0.20. The firms current return on equity (ROE) is 20%. The firm will maintain the same dividend payout and ROE over the next two periods. Then it will transition in a linear reduction in years 3, 4, 5 and 6 to a growth of 3%. The firm will then grow at 3% to perpetuity. What is the expected earnings per share in year 4?
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Foundations Of Real Estate Financial Modelling
Authors: Roger Staiger
2nd Edition
1138046183, 978-1138046184
