(Common

stock

valuation)

Dalton Inc. has a return on equity of

13.7

percent and retains

58

percent of its earnings for reinvestment purposes. It recently paid a dividend of

$3.25

and the stock is currently selling for

$43.

a. What is the growth rate for Dalton Inc.?

b. What is the expected return for Dalton's stock?

c. If you require a

14

percent return, should you invest in the firm?

(Common stock valuation) Dalton Inc. has a return on equity of 13.7 percent and retains 58 percent of its earnings for reinvestment purposes. It recently paid a dividend of $3.25 and the stock is currently selling for $43. a. What is the growth rate for Dalton Inc.? b. What is the expected return for Dalton's stock? c. If you require a 14 percent return, should you invest in the firm? a. What is the growth rate for Dalton Inc.? 7.95% (Round to two decimal places.) b. What is the expected return for Dalton's stock? % (Round to two decimal places.) c. If you require a 14 percent return, should you invest in the firm? (Select from the drop-down menu.)