Question
The PB Plc, as an electricity utility, is guaranteed a 15% return on equity by the state. The companys earnings per share was 100 in
- The PB Plc, as an electricity utility, is guaranteed a 15% return on equity by the state. The company’s earnings per share was €100 in the last closed year. The annual general meeting decided not to pay dividend now and during the following three years, because the market needs are required to make a remarkable capacity enlargement. After this transition period, the company returns to its traditional dividend policy and (first, four years from now) pays out the 90% of the annual earnings as dividend. Calculate the price of the stock with a discount rate (expected rate of return) of 12%!
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
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