XYZ Inc. has expected earnings over the next year of $3/share (E1 = 3). The company is
Fantastic news! We've Found the answer you've been seeking!
Question:
XYZ Inc. has expected earnings over the next year of $3/share (E1 = 3). The company is expected to maintain an earnings retention rate of 20%, i.e., 80% of earnings are expected to be paid out as dividends every year. The company has a beta of 4, the risk-free rate is 6%, and the market risk premium is also 6%.
If the ROE is expected to be 25% in perpetuity
What is the implied growth rate?
What is the value of the stock?
What is the present value of growth opportunities?
Related Book For
Applied Regression Analysis and Other Multivariable Methods
ISBN: 978-1285051086
5th edition
Authors: David G. Kleinbaum, Lawrence L. Kupper, Azhar Nizam, Eli S. Rosenberg
Posted Date: