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Weston Corporation just paid a dividend of $1.00 a share (i.e.,Do = $1.00). Assume Weston has a constant ROE of 10% and it pays
Weston Corporation just paid a dividend of $1.00 a share (i.e.,Do = $1.00). Assume Weston has a constant ROE of 10% and it pays out 40% of net income every year. a. What would the growth rate be? c. How much is the current price if the require rate of return is 12%? d. What is the dividend yield for the first year? e. Should you buy the Weston Corporation stock based on your calculations?
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To answer the questions we can use the Gordon Growth Model which relates the dividend growth rate an...
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Chemistry A Molecular Approach
Authors: Nivaldo Tro
5th Edition
0134874374, 978-0134874371
