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Company Q's current return on equity (ROE) is 15%. It pays out 20 percent of earnings as cash dividends. Current book value per share is
Company Q's current return on equity (ROE) is 15%. It pays out 20 percent of earnings as cash dividends. Current book value per share is $60. Book value per share will grow as Q reinvests earnings. Assume that the ROE and payout ratio stay constant forever. The cost of capital is 20.0%. Question: What is Q's stock worth per share? $69.6 $95.1 $37.7 $25.2 $50.3
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Own Your Money
Authors: Michela Allocca
1st Edition
0760381127, 978-0760381120
