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I am not sure how to get started here... Thanks! 3. Now assume that Laissez-Faire has EPS of $1.89, has 750,000 common shares outstanding, and
I am not sure how to get started here... Thanks!
3. Now assume that Laissez-Faire has EPS of $1.89, has 750,000 common shares outstanding, and has recently paid a dividend of $0.65 per share. Additionally, the firm generated a net income of $1,417,500 and has common stockholders equity of $6,000,000 (book value). You believe the firm is in a constant state of growth, and your required rate of return for investments of this risk level is 18%. The firms common stock is currently trading for $45 per share. Based upon this information, would you be willing to purchase shares of common stock in the firm? Why or why not?
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