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samualson samualson
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Posts: 2459
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6 years ago
Shackleford Corporation net income this year is $800,000. The company generally retains 35% of net income for reinvestment. The company's common equity currently has a book value of $5,000,000. They just paid a dividend of $1.37, and the required rate of return on this stock is 12%. Compute the value of this stock if dividends are expected to continue growing indefinitely at the company's internal growth rate.
A) $22.61
B) $11.42
C) $15.63
D) $4.35
Textbook 
Foundations of Finance

Foundations of Finance


Edition: 9th
Authors:
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wrote...
#1
6 years ago
 A
 
samualson Author
wrote...
#2
6 years ago
I'm still confused, but thanks for answering correctly
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