Question
Suppose ABC shares are currently selling at $394.60. Suppose ABC doesn't pay any dividends, and has the following information: EPS0 = $30 k = 20%
Suppose ABC shares are currently selling at $394.60. Suppose ABC doesn't pay any dividends, and has the following information:
- EPS0 = $30
- k = 20%
- B0 = $100
If we believe that the current share price is correctly priced, what should be the growth rate when we use the residual income model?
A. approx. 13%
B. approx. 15%
C. approx. 17%
D. approx. 13%
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Enterprise Risk Management In Finance
Authors: David L. Olson, Desheng Dash Wu
1st Edition
1349691038, 978-1349691036
