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GroCo is expected to generate $3 earnings per share next year. The company reinvests 40% of its earnings and has a long-term growth rate of

GroCo is expected to generate $3 earnings per share next year. The company reinvests 40% of its earnings and has a long-term growth rate of 4.8%. Its cost of equity is 10%.

Recently some shareholders call for the company to stop reinvesting its earnings and pay out all earnings to shareholders as dividends. Do you agree with these shareholders?

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