Answered: Beta Corp has an ROE of 15%; has just…

Beta Corp has an ROE of 15%; has just paid a dividend of $1.50; pays 10% of its earnings out in dividends, and the appropriate discount rate is 20%. What is the current stock price?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 2P

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Question

Beta Corp has an ROE of 15%; has just paid
a dividend of $1.50; pays 10% of its earnings
out in dividends, and the appropriate
discount rate is 20%.
What is the current stock price?

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