Munro Corporation pays 30% of its earnings to stockholders and retains 70% to finance growth. The firm recently paid a $3.20 common stock dividend. Investors require a return of 14% on Munro's common stock. If the firm earns a return on equity of 15%, what should be the value of Munro's common stock? $83.70 $101.03 $89.50 $82 $91.25

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Munro Corporation pays 30% of its earnings to stockholders and retains 70% to finance growth. The firm recently
paid a $3.20 common stock dividend. Investors require a return of 14% on Munro's common stock. If the firm earns
a return on equity of 15%, what should be the value of Munro's common stock?
$83.70
$101.03
$89.50
$82
$91.25
Transcribed Image Text:Munro Corporation pays 30% of its earnings to stockholders and retains 70% to finance growth. The firm recently paid a $3.20 common stock dividend. Investors require a return of 14% on Munro's common stock. If the firm earns a return on equity of 15%, what should be the value of Munro's common stock? $83.70 $101.03 $89.50 $82 $91.25
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