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Sur company forecasts to pay OMR 6 dividend next year, which represents 100 percent of its earnings. This will provide investors with 8 percent expected
Sur company forecasts to pay OMR 6 dividend next year, which represents 100 percent of its earnings. This will provide investors with 8 percent expected return. Instead, the company decide to plow-back 40 percent of the earnings at the firm's current return on equity of 15 percent. a. What is the value of the stock before the plow-back decision? b. What is the value of the stock after the plow-back decision
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