Question
You expect your company to have earnings of $50 per share in the next twelve months and pay a dividend of $14 per share out
You expect your company to have earnings of $50 per share in the next twelve months and pay a dividend of $14 per share out of those earnings. The company has a return on new investments of 19.5% while their equity cost of capital is 10.1%.
What is the expected growth rate for the company's earnings in percentage points?
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Derivatives Markets
Authors: Robert McDonald
3rd Edition
978-9332536746, 9789332536746
