Question
Company Y reinvests 40% of its earnings and has an ROE of 25%. This is expected to last forever. It has 5 million shares outstanding.
Company Y reinvests 40% of its earnings and has an ROE of 25%. This is expected to last forever. It has 5 million shares outstanding. The required return is 15%. How fast will the firm grow?
| a. | 10% | |
| b. | 15% | |
| c. | 30% | |
| d. | 45% | |
| e. | 60% | |
| f. | None of the above |
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
6th Edition
0201538997, 978-0201538991
