Question
A firm is expected to have earnings next year of $4.99 per share and the firm is expected to pay a dividend of $3.22. Investors'
A firm is expected to have earnings next year of $4.99 per share and the firm is expected to pay a dividend of $3.22. Investors' required rate of return is 8%. If the sustainable growth rate is 2.5%, what must be the rate of return earned by the firm on its new investments? Enter your answer as a percentage. Do not include the percentage sign in your answer.
Enter your response below rounded to 2 DECIMAL PLACES.
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Principles Of Project Finance
Authors: E. R. Yescombe
2nd Edition
0123910587, 9780123910585
