Question

a/b please.

(Common stock valuation) Wayne, Inc.'s outstanding common stock is currently selling in the market for $17. Dividends of $1.88 per share were paid last year, return on equity is 26 percent, and its retention rate is 22 percent. a. What is the value of the stock to you, given a required rate of return of 16 percent? b. Should you purchase this stock? a. Given a required rate of return of 16 percent, the value of the stock to you is $ . (Round to the nearest cent.)

Answer 1

answer. 18.61%

answer @ The value of stock a Do Cl+g)/(ke-92 - where G = growth rate Do & Dividend per last year paid ke rate of rekum required Growth rake a bor where brekention rabio ro rekun on the equiky Growth Mate = 5.72%. (0:26 % ow22) Value of stoca 1.81 (1+5.72%)/(16%-5.72% Joey Togix 1.05 -10:267 € 18.61 as the current price is (8 17 ) is below the tain value of skock ($18.6) one must buy this stock 6 Thank you lease be comment it you have any double inik