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Posted on Aug 13, 2024

Consider a firm with historical ROE = 1 6 % , 4 0 % retained earnings rate, 1 0 0 , 0 0 0 ,

Consider a firm with historical ROE

= 16 %, 40 %

retained earnings rate,

100, 000, 000

shares outstanding, earnings of

2

million, and a stock price of $

10 .

What is

g ?

What is its cost of capital

k ?

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