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Old Reliable Manufacturing Company's stock has a market price of $20 per share and a book value of $10 per share. If its cost of
Old Reliable Manufacturing Company's stock has a market price of $20 per share and a book value of $10 per share. If its cost of equity capital is 15 percent and its book value is expected to grow at 5 percent per year indefinitely, what is the market's assessment of its steady state return on equity? f. 25% g. 30% h. 35% i. 40% j. 45%
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