Question: Dalton Inc has an 11 5 percent return on equity and

Dalton Inc. has an 11.5 percent return on equity and retains 55 percent of its earnings for reinvestment purposes. It recently paid a dividend of $ 3.25 and the stock is currently selling for $ 40.
a. What is the growth rate for Dalton Inc.?
b. What is the expected return for Dalton’s stock?
c. If you require a 13 percent return, should you invest in the firm?

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  • CreatedSeptember 11, 2015
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