Determine what is the companys expected growth rate

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Kahn Inc. has a target capital structure of 65% common equity and 35% debt to fund its $10 billion in operating assets. Furthermore, Kahn Inc. has a WACC of 14%, a before-tax cost of debt of 8%, and a tax rate of 40%. The company's retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend next year (D1) is $2 and the current stock price is $30.

What is the company's expected growth rate?

If the firm's net income is expected to be $1.8 billion, what portion of its net income is the firm expected to pay out as dividends?

Reference no: EM13335221

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