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Your Company has an ROE on book value of 12% and a book value per share of $24 and can continue to achieve this return.

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Your Company has an ROE on book value of 12% and a book value per share of $24 and can continue to achieve this return. The firm intends to plowback 70% of its earnings. The opportunity cost of capital is 10%. Show your work on each part. a. Find time 1 EPS and dividend. (5 points) b. What is the sustainable growth rate. (5 points) c. If the cost of capital is 9%, what is the current stock price? (5 points)

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