Problema stock sells for 20 the next dividend will be 3 per, Ask an Expert

Accounting

Problem:

A stock sells for $20. The next dividend will be $3 per share. If the return on equity ROE is a constant 12% and the company reinvests 50% of earnings in the firm,

Required:

Question: What must be the opportunity cost of capital?

Note: Show all workings.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91172604

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