Assume the return on equity, ROE = 10%, and DIV1 = $4. Plowback ratio is 40%. (a)
Question:
(a) What is the expected rate of return from purchasing the stock at $100?
(b) What part of the $100 price is attributed to the present value of growth opportunities?
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Related Book For 
Principles of Corporate Finance
ISBN: 978-0072869460
7th edition
Authors: Richard A. Brealey, Stewart C. Myers
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