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Web Cites Research projects a rate of return of 21 percent on new projects. Management plans to plow back 45 percent of all earnings into
Web Cites Research projects a rate of return of 21 percent on new projects. Management plans to plow back 45 percent of all earnings into the firm. Earnings this year will be $4.1 per share, and investors expect a 10 percent rate of return on the stock. What is the sustainable growth rate? What is the stock price? What is the present value of growth opportunities? What is the P/E ratio? What would the price and P/E ratio be if the firm paid out all earnings as dividends
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