Question
Stark Industries expects an earnings per share of $2.26 and reinvests 40% of its earnings. Management projects a rate of return of 2% on new
Stark Industries expects an earnings per share of $2.26 and reinvests 40% of its earnings. Management projects a rate of return of 2% on new projects and investors expect a 5% rate of return on the stock. What is the sustainable growth rate? Enter your answer as a percentage. Do not include the percentage sign in your answer.
Given a sustainable growth rate of 0.8%, what is the price of the stock with growth?
With no growth?
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Analysis for Financial Management
Authors: Robert C. Higgins
10th edition
007803468X, 978-0078034688
