Firm XYZ expects to earn $6 per share next year. In the next three years, the firms
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Firm XYZ expects to earn $6 per share next year. In the next three years, the firm’s ROE is expected to be 12%, 15%, and 18%, respectively, and its dividend payout ratio is 90%. After that, the firm's ROE is expected to increase to 25%, and the firm will set the dividend payout ratio = to 60%. Assume that the discount rate is 20%. Find the stock price.
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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