Given the following information (assuming no taxes),ROCE = 22%; D/V = 60%; Cost of Debt = 12%;
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Given the following information (assuming no taxes),ROCE = 22%; D/V = 60%; Cost of Debt = 12%; Payout ratio= 30%; Target 'g' = 30%
a. What is the implied growth rate?
b. For target 'g', assuming other things remain constant, what is revised ROCE?
c. For target 'g', assuming other things remain constant, what is revised D/V?
d. For target 'g', assuming other things remain constant, what is revised payout? e. Comment on this framework in suggesting future course of action.
Expert Answer:
Okay let me rework this with more clarity a Given ROCE 22 DV 60 Cost of debt 12 ... View the full answer
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