During 2012, Starbucks Coffee’s common stock had been selling for between $30 and $60. Its most recent earnings per share was $1.73, and the firm was expected to pay a dividend of $0.68. The company’s return on equity ( net income, total common equity) has been 25 percent. You are planning on investing in 100 shares of the stock, but you want a 17 percent return on your investment. Given the limited information, what growth would you estimate for starbucks? What price would be required for you to earn your required return?

 

Answer rating: 100% (QA)

Based on the information provided we can estimate the required growth rate and price per share for Starbucks stock to achieve your desired 17 return b... View the full answer