Question: Question 5 . ( 3 points ) The common stock of Stanley Black and Decker ( SWK ) is currently selling for $ 1 4

Question 5.(3 points) The common stock of Stanley Black and Decker (SWK) is currently selling for $147.46 per share. The stocks current dividend is $2.32 per share (assume that this will be paid in one year). The firms Price-to-Earnings (P/E = Stock Price /EPS) Ratio is 16.83. Assume that the appropriate discount rate, or opportunity cost of capital, for SWK stock is 11.00%.(a) Using the Gordon Growth model, what is the growth rate, g, implied by Stanley Black and Deckers stock and the above information? (b) What is the return on equity (ROE) implied by this value of g and the above information?

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