Problemyakey corporations roe is 14 their dividend payout, Ask an Expert

Finance

Problem:

Yakey Corporation's ROE is 14%. Their dividend payout ratio is 40%. The last dividend, just paid, was $2.58. If dividends are expected to grow by the company's sustainable growth rate indefinitely,

Required:

What is the current value of Yakey common stock if its required return is 18%?

a) $26.87

b) $21.97

c) $29.13

d) $20.81

Note: Show all workings.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91147825

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