The market expects that Acme Corporation will have $4.00 in earnings per share and pay a...
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The market expects that Acme Corporation will have $4.00 in earnings per share and pay a dividend per share of $1.50 in one year. Its return on equity (ROE) is expected to remain constant at 8%. If the market's required rate of return on this stock is 12%, then what should the market price be? The market expects that Acme Corporation will have $4.00 in earnings per share and pay a dividend per share of $1.50 in one year. Its return on equity (ROE) is expected to remain constant at 8%. If the market's required rate of return on this stock is 12%, then what should the market price be?
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