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You are analyzing the stock of Brother Industries, Ltd. (Tokyo Stock Exchange: 64480). You have concluded that a multistage DDM is appropriate to value the
You are analyzing the stock of Brother Industries, Ltd. (Tokyo Stock Exchange: 64480). You have concluded that a multistage DDM is appropriate to value the stock of Brother Industries and the company will reach a mature stage in four years. You have estimated that in the mature phase Brother's ROE will be 11%, which is approximately equal to estimated required return on equity. He also estimated that the retention ratio in the mature phase will be 60%. Calculate the sustainable growth rate for Brother in the mature phase.Please show your work to earn credits
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