What is hd plow-back ratio

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Home Depot's (HD) stock price is $400. HD's current earnings are $12 and its current dividend is $6 per share. HD's beta is 1.2, the risk-free rate is 1%, and the expected market return is 7%.

Report all answers as a percentage rounded to one decimal place, e.g. "1.2%".

(a) What is HD's plow-back ratio?

(b) What growth rate is the market pricing in for HD?

(c) Your own analysis predicts that HD's growth rate will be 7.2%. You decide to buy HD. Soon after, news comes that HD's growth rate will indeed be 7.2% and HD's stock price adjusts to reflect this. You decide to sell HD. What was your holding period return (not annualized)?

Reference no: EM133111231

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