What is the sustainable growth rate

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Your Cempany has an ROE on book value of 12% and a book value per share of $24 and can continue to achieve this return. The firm intends to plowback 70% of its earnings. The opportunity cost of capital is 10%. Show your work on each part.

a. Find time 1 EP8 and dividend.

b. What is the sustainable growth rate.

c. It the cost of capital is 9%, what is the current stock price?

Reference no: EM133074773

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