Question
Jumbo Transport, an air-cargo company, expects to have earnings per share of $2.00 in the coming year. It decides to retain 10% of these earnings
Jumbo Transport, an air-cargo company, expects to have earnings per share of
$2.00
in the coming year. It decides to retain
10%
of these earnings in order to lease new aircraft. The return on this investment will be 25%. If its equity cost of capital is
10%,
what is the expected share price of Jumbo Transport?
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Cases In Healthcare Finance
Authors: Louis C. Gapenski
3rd Edition
1567932444, 9781567932447
