Solution-Valuation of common shares

Valuation of common shares

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Reference no: EM131114120

(Valuation of Common Shares): XYZ Inc. has a 11.5% return on equity and retains 55% of its profits for re-investment purposes. Recently he paid a dividend of $ 3.25, and the stock sells at $ 40 currently.

a. What is the growth rate of XYZ?

b. What is the expected rate of return of the shares of XYZ?

c. If you require 13% yield, you should invest in the firm?

Reference no: EM131114120

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Valuation of common shares : XYZ Inc. has a 11.5% return on equity and retains 55% of its profits for re-investment purposes. Recently he paid a dividend of $ 3.25, and the stock sells at $ 40 currently.

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Valuation of common shares

Reference no: EM131114120

Reference no: EM131114120

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