Question: ( Common stock valuation ) Wayne, Inc. ' s outstanding common stock is currently selling in the market for $ 2 5 . Dividends of

(Common stock valuation) Wayne, Inc.'s outstanding common stock is currently selling in the market for $25. Dividends of $2.18 per share were paid last year, return on equity is 22 percent, and its retention
rate is 29 percent.
a. What is the value of the stock to you, given a required rate of return of 14 percent?
b. Should you purchase this stock?
(Common stock valuation) Wayne, Inc.'s outstanding common stock is currently selling

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