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The Gecko Company and the Gordon Company are two firms whose business risk is the same but that have different dividend policies Gecko pays no
The Gecko Company and the Gordon Company are two firms whose business risk is the same but that have different dividend policies Gecko pays no dividend, whereas Gordon has an expected dividend yield of percent. Suppose the capital gains tax rate is zero, whereas the income tax rates 30 percent. Gacho has an expected earnings growth rate of 9 percent annually, and its stock price is expected to grow at this same rate w the aftertax expected returns on the two stocks are not because they are in the same liek ces), what is the pretux required retum on Gordon's stock? (Do not found intermediate calculations and enter your answer as a percent rounded to 2 decimal places, ... 32.16.) Protax return
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