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hello can someone please help me with this finance question please and thank you The Sicamous Company and the Revelstoke Company are two firms whose
hello can someone please help me with this finance question please and thank you
The Sicamous Company and the Revelstoke Company are two firms whose business risk is the same but that have different dividend policies. Sicamous pays no dividend, whereas Revelstoke has an expected dividend yield of 9%. Suppose the capital gains tax rate is zero, whereas the income tax rate is 30%. Sicamous has an expected earnings growth rate of 17% annually, and its stock price is expected to grow at this same rate. If the after-tax expected returns on the two stocks are equal (because they are in the same risk class). What is the pre-tax required return on Revelstoke's stock? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Pre-tax return %Step by Step Solution
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