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(Common stock valuation) Dalton Inc. has a return on equity of 12.1 percent and retains 54 percent of its earnings for reinvestment purposes. It recently paid a dividend of $3.25 and the stock is currently selling for $42. a. What is the growth rate for Dalton Inc? b. What is the expected return for Dalton's stock? c. If you require a 14 percent return, should you invest in the firm? a. What is the growth rate for Dalton Inc.? % (Round to two decimal places.) Problem 8-12 (similar to) 13 Question Help (Common stock valuation) You intend to purchase Dorchester common stock at $49.50 per share, hold it for 1 year, and then sell it after a dividend of $6.50 is paid. How much will the stock price have to appreciate for you to satisfy your required rate of return of 15 percent? The stock price have to appreciate %. (Round to two decimal places.) Problem 8-18 (similar to) Question Help (Common stock valuation) Abercrombie & Fitch's common stock pays a dividend of $1.25. It is currently selling for $36.85. If the firm's investors require a return of 10 percent on their investment from buying Abercrombie & Fitch stock, what growth rate would Abercrombie & Fitch have to provide the investors? The growth rate Abercrombie & Fitch would have to provide the investors is %. (Round to two decimal places.) Bookmatch 8-19 (book/static) Question Help (Common stock valuation) Schlumberger is selling for $64.91 per share and paid a dividend of $1.10 last year. The dividend is expected to grow at 4 percent indefinitely. What is the stock's expected rate of return? The stock's expected rate of return is % (Round to two decimal places.) Bookmatch 8-9 (book/static) Question Help (Measuring growth) The Cammack Corporation wants to achieve a steady 7 percent growth rate. If it can achieve a return on equity of 12 percent, what percentage of earnings must Cammack retain for investment purposes? The percentage of earnings Cammack must retain (or the profit-retention rate) is %. (Round to two decimal places.) (Common stock valuation) Dalton Inc. has a return on equity of 12.1 percent and retains 54 percent of its earnings for reinvestment purposes. It recently paid a dividend of $3.25 and the stock is currently selling for $42. a. What is the growth rate for Dalton Inc? b. What is the expected return for Dalton's stock? c. If you require a 14 percent return, should you invest in the firm? a. What is the growth rate for Dalton Inc.? % (Round to two decimal places.) Problem 8-12 (similar to) 13 Question Help (Common stock valuation) You intend to purchase Dorchester common stock at $49.50 per share, hold it for 1 year, and then sell it after a dividend of $6.50 is paid. How much will the stock price have to appreciate for you to satisfy your required rate of return of 15 percent? The stock price have to appreciate %. (Round to two decimal places.) Problem 8-18 (similar to) Question Help (Common stock valuation) Abercrombie & Fitch's common stock pays a dividend of $1.25. It is currently selling for $36.85. If the firm's investors require a return of 10 percent on their investment from buying Abercrombie & Fitch stock, what growth rate would Abercrombie & Fitch have to provide the investors? The growth rate Abercrombie & Fitch would have to provide the investors is %. (Round to two decimal places.) Bookmatch 8-19 (book/static) Question Help (Common stock valuation) Schlumberger is selling for $64.91 per share and paid a dividend of $1.10 last year. The dividend is expected to grow at 4 percent indefinitely. What is the stock's expected rate of return? The stock's expected rate of return is % (Round to two decimal places.) Bookmatch 8-9 (book/static) Question Help (Measuring growth) The Cammack Corporation wants to achieve a steady 7 percent growth rate. If it can achieve a return on equity of 12 percent, what percentage of earnings must Cammack retain for investment purposes? The percentage of earnings Cammack must retain (or the profit-retention rate) is %. (Round to two decimal places.)