Mercury Satellite Corporation earned $25 million for the fiscal year ending yesterday. The firms policy is to
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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?
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Corporate Finance
ISBN: 9781260772388
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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