a) LTX's growth rate of earnings is % (Round your answer to four decimal places) (b) If LTX's equity cost of capital is 12.912.9%, then LTX's share price will be $$ (Round your answer to the nearest cent) (c) If LTX paid a dividend of $$4.134.13 per share this year and retained only $$1.141.14 per share in earnings. That is, it chose to pay a higher dividend instead of reinvesting its profits in as many new projects as it was going to under its original plan. If LTX maintains this new, higher payout rate in the future, then LTX's share price would be $$. (Round your answer to the nearest cent) d) Should LTX follow this new policy? (Select the best choice below)
LTX Ltd expects earnings this year of $$5.275.27 per share, and it plans to pay a $$3.413.41 dividend to shareholders. LTX will retain $$1.861.86 per share of its earnings to reinvest in new projects which have an expected return of 16.516.5% per year. Suppose LTX will maintain the same
(a) LTX's growth rate of earnings is %
(Round your answer to four decimal places)
(b) If LTX's equity cost of capital is 12.912.9%, then LTX's share price will be $$
(Round your answer to the nearest cent)
(c) If LTX paid a dividend of $$4.134.13 per share this year and retained only $$1.141.14 per share in earnings. That is, it chose to pay a higher dividend instead of reinvesting its profits in as many new projects as it was going to under its original plan. If LTX maintains this new, higher payout rate in the future, then LTX's share price would be $$.
(Round your answer to the nearest cent)
d) Should LTX follow this new policy?
(Select the best choice below)
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