Question
You expect KT industries (KTI) will have earnings per share of $4 this year and expect that they will pay out $2.25 of these earnings
You expect KT industries (KTI) will have earnings per share of $4 this year and expect that they will pay out $2.25 of these earnings to shareholders in the form of a dividend. KTI's return on new investments is 15% and their equity cost of capital is 15%. The value of a share of KTI's stock is closest to:
A. $10.67
B. $16
C. $32
D. $26.67
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Management For Public, Health, And Not-for-Profit Organizations
Authors: Steven A. Finkler, Daniel L. Smith, Thad D. Calabrese, Robert M. Purtell
6th Edition
150639681X, 978-1506396811
