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Metatrend's stock will generate earnings of $5 per share this year. The discount rate for the stock is 15% and the rate of return on
Metatrend's stock will generate earnings of $5 per share this year. The discount rate for the stock is 15% and the rate of return on reinvested earnings is also 15%. a-1. Find both the growth rate of dividends and the price of the stock if the company reinvests the following fraction of its earnings in the firm: 0%. (Round your answers to 2 decimal places.) g % Po a-2. Find both the growth rate of dividends and the price of the stock if the company reinvests the following fraction of its earnings in the firm: 40%. (Round your answers to 2 decimal places.) % g Po a-3. Find both the growth rate of dividends and the price of the stock if the company reinvests the following fraction of its earnings in the firm: 60%. (Round your answers to 2 decimal places.) % g Po b-1. Assume that the rate of return on reinvested earnings 20%. Find both the growth rate of dividends and the price of the stock if the company reinvests the following fraction of its earnings in the firm: 0%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) g % Po b-2. Now assume that the rate of return on reinvested earnings is 20%. Find both the growth rate of dividends and the price of the stock if the company reinvests the following fraction of its earnings in the firm: 40%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) g % Po b-3. Now assume that the rate of return on reinvested earnings is 20%. Find both the growth rate of dividends and the price of the stock if the company reinvests the following fraction of its earnings in the firm: 60%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) g % Po
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