Music Inc. reinvests 55% of its earnings. The remaining part is paid out as dividends. The consensus earnings-per-share forecast among analysts for the next year is $8.55, the ROE of the company remains stable at 14%, and its required rate of return is 13%. 

What is the fair value of the stock price of Music Inc.?

Answer rating: 100% (QA)

To determine the fair value of the stock price of Music Inc we can use the Gordon Growth Model also ... View the full answer