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Unformatted text preview: of its earnings as dividends, and it has a historical ROE of 12%. Assume the market expects a 10% return from investing in XYZ stock. (a) What is XYZs expected growth rate in dividends? (b) What is XYZs current share price (Assuming the DDM)? (c) The CEO of XYZ believes the stock should have a current P/E ratio of 20. What dividend policy should achieve this?...
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This note was uploaded on 04/27/2010 for the course ACTSC 371 taught by Professor Wood during the Spring '08 term at Waterloo.
- Spring '08