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The fly Inc. currently has earnings per share of $8.00. The company has no growth and pays out all earnings as dividends. It has a
The fly Inc. currently has earnings per share of $8.00. The company has no growth and pays out all earnings as dividends. It has a new project that will require an investment of $2.00 per share in one year. The project is only a three-year project, and it will increase earnings in the three years following the investment by $1.00, $2.00 and $3.00, respectively. Investors require a return of 10 percent on FLY Inc stock. Assume the company undertakes the investment. What will be the price per share of FLY Inc. five years from today?
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