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Common stock valuation)Wayne, Inc.'s outstanding common stock is currently selling in the market for $38. Dividends of $3.17 per share were paid last year, return

Common stock valuation)Wayne, Inc.'s outstanding common stock is currently selling in the market for $38. Dividends of $3.17 per share were paid last year, return on equity is 33 percent, and its retention rate is 23 percent.

a .What is the value of the stock to you, given a required rate of return of 18 percent?

b. Should you purchase this stock?

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