Question
homework question # 4 Scott Companies stockis valued correctlyin the market today at $16.00 per share.They are expected to have earnings of $2.00 per share
homework question # 4
Scott Companies stockis valued correctlyin the market today at $16.00 per share.They are expected to have earnings of $2.00 per share over the next year.Investors expect earnings and dividends to grow by 7% and to continue to grow at 7% forever.The firm has a policy of always paying out 60% of their earnings in dividends each year.How muchvalue per share is being added or destroyedby the retention and reinvestment of earnings compared to the no-growth value of the firm.
Provide the No Growth Stock Value and the value added per share below
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