Company a maintains a rate of return of 15 on its equity


Company A maintains a rate of return of 15% on its equity. Management currently pays out all of its earnings as dividends. Company A anticipates year-end earnigns of $2.40 per share, and investors expect a 10% rate of return on stocks facing the same risks as Company A. Under the current payout plan, at what price should Company A's stock sell? If Company A plowed back 40% of it's earnings into the firm, at what price will their stock sell? What is the present value of Company A's growth opportunities?

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Financial Management: Company a maintains a rate of return of 15 on its equity
Reference No:- TGS02801890

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