Question
A company projects an earning of $3 per share. Management plans to plowback 30 percent of all earnings into the firm for new investment, and
A company projects an earning of $3 per share. Management plans to plowback 30 percent of all earnings into the firm for new investment, and if they do so, the value of the stock today $35 per share. Assume the investors expect a 12 percent return on the stock. What is the rate of return on new investment for the company?
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The Repo Handbook
Authors: Moorad Choudhry
1st Edition
0750651628, 978-0750651622
