Question: Problem 3: Roberts Jeans & Co outstanding common stock is currently selling in the market for 33 $. Dividends of 2,3 $ per share were

Problem 3: Roberts Jeans & Co outstanding common stock is currently selling in the market for 33 $. Dividends of 2,3 $ per share were paid last year, return on equity is 20% and its retention rate is 25 %. Picture the problem, decide on a solution strategy, solve and analyze. a) What is the value of the stock to you given a required rated of return of 16%? (15 points) b) Should you purchase this stock? (5 points)

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