Assume that price of the security discussed in Problem 2
Assume that price of the security discussed in Problem 2 was $30. Assume that all other information is the same except for the stockholders' required return. What does a $30 price imply for return?
In Problem 2
Assume the next period's dividend is $1, that stockholders require a 12% return, that new investment is expected to yield 14%, and that the retention rate is 50%.
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