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Memphic Memphic
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6 years ago
You expect that Bean Enterprises will have earnings per share of $2 for the coming year.  Bean plans to retain all of its earnings for the next three years.  For the subsequent two years, the firm plans on retaining 50% of its earnings.  It will then retain only 25% of its earnings from that point forward.  Retained earnings will be invested in projects with an expected return of 20% per year.  If Bean's equity cost of capital is 12%, then the price of a share of Bean's stock is closest to:
A) $17.00
B) $10.75
C) $27.75
D) $43.50
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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pbrown223pbrown223
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6 years ago
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Memphic Author
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6 years ago
Helped a lot
Lawson1981
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Yesterday
this is exactly what I needed
avance37
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2 hours ago
Brilliant ツ
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