Assume hallifords share count remains constant and all


Halliford Corporation expects to have earnings this year of 2.71 share. Halliford plans to retain all its earnings for the next two years. For the subsequent two years, the firm will retain 45% of its earnings. It will then retain 17 of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 18.24% per year. Any earnings that are not retained will be paid out as dividends. Assume Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Halliford's equity cost of capital is 8.9 what price would you estimate for Halliford stock?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Assume hallifords share count remains constant and all
Reference No:- TGS02368316

Expected delivery within 24 Hours