Question
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 ROE and payout ratio stay constant forever. The cost of capital is 20%. What is Q's stock worth per share?
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Mathematical Finance Core Theory Problems And Statistical Algorithms
Authors: Nikolai Dokuchaev
1st Edition
0415414482, 978-0415414487
