G E D H J A B K 1 P10-7 Modified (see problem below for revisions) 2 3 Wayne, Inc.'s outstanding common stock is currently selling in the market for $30. Dividends of $1.60 per share were paid last year, return on equity is 18%, and its retention rate is 50%. a. What is the value of the stock to you, given a 15% required rate of return? 5 b. Should you purchase the stock? 6 7 8 D. = 9 a. 10 11 12 ROE = Ret R Values 13 14 15 16 17 b. 18 19 20 21 22 23 24 25 26 27 28 29 30