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True Corporation is forecasting to pay a $7.00 dividend next year, which represents 100% of its earnings. This will provide investors with a 12% expected
True Corporation is forecasting to pay a $7.00 dividend next year, which represents 100% of its earnings. This will provide investors with a 12% expected return. Instead, True Corporation decides to plow back 20% of the earnings at the firms current return on equity of 15%. What is the value of the stock before and after the plowback decision?
Please show excel tables and formulas
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