You are analyzing the stock of a public utility. The company's most recent earnings per share equaled

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You are analyzing the stock of a public utility. The company's most recent earnings per share equaled $3.50. The company's retention rate is 0.60. Te company's return on equity is 14 percent. The cost of equity is 12 percent.

a. What is the sustainable growth rate?

b. Based on the sustainable growth rate and the other information provided to you, what is your estimate of the company's equity value?

c. What is the present value of growth opportunities?

Related Book For answer-question

Applied Corporate Finance

ISBN: 978-1118808931

4th edition

Authors: Aswath Damodaran

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Posted Date: Mar 18, 2022 04:13 AM

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You are analyzing the stock of a public utility. The company's most recent earnings per share equaled

Question:

Expert Answer:

1 Sustainable growth rate return on equity x retention rate 01460 8... View the full answer

Applied Corporate Finance

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