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Common stock​ valuation)  ​Wayne, Inc.'s outstanding common stock is currently selling in the market for ​$24. Dividends of ​$3.01 per share were paid last​ year, return on equity is 21 ​percent, and its retention rate is 24 percent.   a.  What is the value of the stock to​ you, given a required rate of return of 19 ​percent? b.  Should you purchase this​ stock?       Question content area bottom Part 1 a.   Given a required rate of return of

Common stock​ valuation)  ​Wayne, Inc.'s outstanding common stock is currently selling in the market for ​$24. Dividends of ​$3.01 per share were paid last​ year, return on equity is 21 ​percent, and its retention rate is 24 percent.   a.  What is the value of the stock to​ you, given a required rate of return of 19 ​percent? b.  Should you purchase this​ stock?       Question content area bottom Part 1 a.   Given a required rate of return of

Intermediate Financial Management (MindTap Course List)
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 12P
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​(Common stock​ valuation)  ​Wayne, Inc.'s outstanding common stock is currently selling in the market for
​$24.
Dividends of
​$3.01
per share were paid last​ year, return on equity is
21
​percent, and its retention rate is
24
percent.
 
a.  What is the value of the stock to​ you, given a required rate of return of
19
​percent?
b.  Should you purchase this​ stock?
 
 
 

Question content area bottom

Part 1
a.  
Given
a required rate of return of
19
​percent, the value of the stock to you is
​$enter your response here.
​(Round to the nearest​ cent.)
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