Spencer Supplies’ stock is currently selling for $60 a share. The firm is expected toearn $5.40 per share this year and to pay a year-end dividend of $3.60.a. If investors require a 9% return, what rate of growth must be expected forSpencer?
If Spencer reinvests earnings in projects with average returns equal to thestock’s expected rate of return, what will be next year’s EPS? [Hint: g ROE(Retention ratio).
Already registered? Login
Not Account? Sign up
Enter your email address to reset your password
Back to Login? Click here