A firm is expected to produce earnings next year of $4 per share. It plans to reinvest 30% of its earnings at an ROE of
A firm is expected to produce earnings next year of $4 per share. It plans to reinvest 30% of its earnings at an ROE of 20%. If the cost of equity is 13%, what should be the value of the stock?
| A. | $42.40 per share | |
| B. | $50 per share | |
| C. | $57.14 per share | |
| D. | $40.00 per share |
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Authors: Assaf Kedem
1st Edition
1119356725, 978-1119356721
