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Business, 18.09.2019 17:40 ajay67

Rearden metals expects to have earnings this coming year of $2.50 per share. rearden plans to retain all of its earnings for the next year. for the subsequent three years, the firm will retain 50% of its earnings. it will ten retain 25% of its earnings from that point onward. each year, retained earnings will be invested in new projects with an expected return of 20% per year. any earnings that are not retained will be paid out as dividends. assume rearden's shares outstanding remains constant and all earnings growth comes from the investment of retained earnings. if rearden's equity cost of capital is 10%, then rearden's stock price is closest to:

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Rearden metals expects to have earnings this coming year of $2.50 per share. rearden plans to retain...
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