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Provide your answers and show your work. XYZ Inc. pays $3 current dividend out of its net income of $5. XYZ Inc. has return on
Provide your answers and show your work. XYZ Inc. pays $3 current dividend out of its net income of $5. XYZ Inc. has return on investment of 15%, and a beta of its stock is 1.25. Its dividends are assumed to grow at a constant .rate indefinitely. Assume market return of 12.5% and risk-free rate of 3.9%. (1) What is the retention ratio? (2) Find the growth rate of dividends. (3) Find the require rate of return of its stock. (4) Use the constant growth rate model to find the value of the stock
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