The Wagner company's stock is listed on NASDAQ. The current stock price is $50. The next dividend will be $5 per share. If Wagner reinvests a constant 40% of its earnings, and the rate of return on reinvested funds is a constant 12%, what must be the discount rate? 

Hint: calculate the growth rate to start with.

Answer rating: 100% (QA)

To calculate the discount rate we can use the Gordon Growth Model also known as the Dividend D... View the full answer