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please solve all the parts Check my work 5 Metatrend's stock will generate earnings of $6 per share this year. The discount rate for the
please solve all the parts
Check my work 5 Metatrend's stock will generate earnings of $6 per share this year. The discount rate for the stock is 15%, and the rate of return on reinvested earnings also is 15%. 5 points a. 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) 0%; (ii) 40%; (iii) 60%. (Do not round intermediate calculations. Enter the growth rates as a whole percent.) Reinvestment of Earnings 0% 40% 60% eBook Growth rate of dividends Stock price References b. Redo part (a) now assuming that the rate of return on reinvested earnings is 20%. What is the present value of growth opportunities (PVGO) for each reinvestment rate? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Reinvestment of Earnings 0% 40% 60% PVGOStep by Step Solution
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