Question
ABC Corp. has an ROE of 7% and reinvests 40% of its net income. ABC has just paid an annual dividend of $0.29. ABC stock
ABC Corp. has an ROE of 7% and reinvests 40% of its net income. ABC has just paid an annual dividend of $0.29.
ABC stock has a beta of 0.9. The risk-free rate is 3.5% and the expected return on the market portfolio is 6%.
a)What is the appropriate discount rate?
b)What is the expected growth rate of dividends?
c)What is the intrinsic value (fair price) of ABC stock?
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Flipping Houses QuickStart Guide The Simplified Beginners Guide To Finding And Financing The Right Properties Strategically Adding Value And Flipping For A Profit
Authors: Elisa Zheng Covington
1st Edition
1636100309, 978-1636100302
