Question
Fortress of Solitude Co. expects an earnings per share of $1.59 and reinvests 20% of its earnings. Management projects a rate of return of 7%
Fortress of Solitude Co. expects an earnings per share of $1.59 and reinvests 20% of its earnings. Management projects a rate of return of 7% on new projects and investors expect a 7% rate of return on the stock. What is the sustainable growth rate? Enter your answer as a percentage. Do not include the percentage sign in your answer.
a. Enter your response below rounded to 2 DECIMAL PLACES.
b. Given a sustainable growth rate of 1.4%, what is the price of the stock with growth?
Enter your response below rounded to 2 DECIMAL PLACES.
c. What would be the price of the stock with no growth?
Enter your response below rounded to 2 DECIMAL PLACES.
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The Budget Building Book For Nonprofits
Authors: Murray Dropkin, Jim Halpin, Bill La Touche
2nd Edition
0787996033, 978-0787996031
