Dalton inc. has an 11.5 percent return on equity and retains 55 percent of its earnings for reinvestment purposes. It recently paid a dividend of $3.25 and the stock is currently selling for $40. a. What is the growth rate for Dalton Inc.? b. What is the expected return for Dalton's stock? c. If you require a 13 percent return, should you invest in the firm?
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- Dalton Inc. has a return on equity of 10.6 percent and retains 54 percent of its earnings for reinvestment purposes. It recently paid a dividend of $3.25 and the stock is currently selling for $42. a. What is the growth rate for Dalton Inc.? b. What is the expected return for Dalton's stock? c. If you require a 14 percent return, should you invest in the firm?Bates, Inc. pays a dividend of $1.00 and is currently selling for $32.50. If investors require a 12% returnon their investment from buying Bates stock, what growth rate would Bates Inc. have to provideinvestors?The investment banking firm of Stan Inc. will use a dividend valuation model to appraise the shares of the DB Corporation. Dividends (D) at the end of the current year will be P1.20. The growth rate (g) is 9% and the discount rate (K) is 13%?
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