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MW Co. expects earnings of $1.25 per share next year, out of which $0.50 will be paid out as dividends. Earning and dividends are expected
MW Co. expects earnings of $1.25 per share next year, out of which $0.50 will be paid out as dividends. Earning and dividends are expected to grow at a constant rate g each year afterwards. MW shares are now traded at $20. The cost of capital for MW Co. is 10%. (a) What is the expected growth rate of earnings g ? (b) What is the ROE for MW
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