Next year’s expected firm earnings are $4,000, shares outstanding 1000, ROE=14%capitalization rate 10%, b(plowback ratio)=10% and assuming constant growth dividends. Calculate Po and Po in a no-growth case (b=0)
Next year’s expected firm earnings are $4,000, shares outstanding 1000, ROE=14%capitalization rate 10%, b(plowback ratio)=10% and assuming constant growth dividends. Calculate Po and Po in a no-growth case (b=0)
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 7P
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Next year’s expected firm earnings are $4,000, shares outstanding 1000, ROE=14%capitalization rate 10%, b(plowback ratio)=10% and assuming constant growth dividends.
Calculate Po and Po in a no-growth case (b=0)
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