Question
Ten years have passed, and DataMapp Inc. has grown to be a very successful company that Bob needs to expand. Recently, Bob decided to make
Ten years have passed, and DataMapp Inc. has grown to be a very successful company that Bob needs to expand. Recently, Bob decided to make DataMaApp public in order to raise capital for expansion. DataMaApps most recent annual dividend was $1.64 per share and DataMaApp stock sells for $27 per share. DataMaApp as well as investors are confident the dividends will have a growth rate of 3% per year. What rate of return should be expected on DataMaApp stock?. If an investor requires a rate of return of 10%, what growth rate will DataMaApp need to achieve?. If DataMaApp can have a sustainable growth rate of 5% and a plowback ratio of 0.4, what rate of return is DataMaApp earning on its new investments?
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