solution

AFC’s stock will generate carnings of S4 per share this year. The discount rate for the stock is 4 percent and the rate of return on reinvested caming is 8%

a. Find the growth rate of dividends and the price of the stock if the company retains 40% earnings. Growth rate: Price/Share:
b. What is the present value of growth opportunities if the company retains 40%? PVGO =
c. What is the price of the stock one year afterwards if the company retains 40%? PI= d. What is the dividend yield and capital gain yield if the company retains 40% earnings? Assuming you sell the stock one year afterwards.

 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now