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Netix expects to have earnings this coming year of $3.23 per share. Netix plans to retain all of its earnings for the next two years.
Netix expects to have earnings this coming year of $3.23 per share. Netix plans to retain all of its earnings for the next two years. For the subsequent two years, the rm will retain 4?% of its earnings. It will then retain 211% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 2.51% per year. Any earnings that are not retained will be paid out as dividends. Assume Netix's share count remains constant and all earnings growth comes from the investment of retained earnings. If Netix's equity cost of capital is 11.5%, what price would you estimate for Netix stock in years [1, 1, and 2
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