Question
(Common stock valuation)Wayne, Inc.'s outstanding common stock is currently selling in the market for $35. Dividends of $2.42 per share were paid last year, return
(Common stock valuation)Wayne, Inc.'s outstanding common stock is currently selling in the market for $35. Dividends of $2.42 per share were paid last year, return on equity is 27 percent, and its retention rate is 21 percent.
a.What is the value of the stock to you, given a required rate of return of 14 percent?
b.Should you purchase this stock?
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Mathematics Of Finance
Authors: Robert Brown, Petr Zima
2nd Edition
0071756051, 9780071756051
