If the firm decides to pay out all earning as dividends


Bent CO. at the end of the year will have EPS of $6 and if the firm has a cost of capital of 12%:

A) if the firm decides to pay out all earning as dividends what would todays firm value be? 

B) IF the firm decides to pay out 75%, 50%, or 25% of earnings and the firms return on investment is 15% what firm value will the company have?

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Financial Management: If the firm decides to pay out all earning as dividends
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