Mercury Satellite Corporation earned $25 million for the fiscal year ending yesterday. The firms policy is to
Question:
Mercury Satellite Corporation earned $25 million for the fiscal year ending yesterday. The firm’s policy is to pay out 40 percent of its earnings as dividends. The remaining 60 percent of earnings is retained by the company for use in projects. The company has 2.9 million shares of common stock outstanding. The current stock price is $109. The historical return on equity (ROE) of 11 percent is expected to continue in the future. What is the required rate of return on the stock?
Step by Step Answer:
The required rate of return on the stock 4060 067 or 67 To find ...View the full answer
Corporate Finance
ISBN: 9781260772388
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
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