These firms will generally have much lower expected

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Unformatted text preview: end paying stocks in Table 2.5 that have sustainable dividends –the firms that have dividends that exceed free cashflows to equity were eliminated. In Table 2.6, the sustainable growth rates in these firms are estimated and compared to analyst estimates of expected growth: Table 2.6: Fundamental and Analyst Estimates of Growth for firms with sustainable dividends ROE Payout Ratio Expected Growth Analyst Estimate of 5-year growth MicroFinancial Inc 1.71% 15.87% 1.44% NA Mission West Pptys 6.55% 38.10% 4.05% NA Koger Equity Inc. 7.66% 47.62% 4.01% NA R.J. Reynolds Tobacco 2.81% 60.13% 1.12% 5.50% 10.53% 62.50% 3.95% NA Company Name Advanced Tobacco 8 You can still maintain high growth in net income by issuing new equity, but this action will increase the number of shares outstanding. 37 Apex Mortgage Capital 4.53% 64.31% 1.62% NA Permian Basin Rty Tr 4.16% 65.88% 1.42% NA Williams Coal Sm Gs 5.44% 66.17% 1.84% NA Allegheny Energy -1.25% 68.53% -0.39% 3.00% MFA Mortgage 3.38% 70.89% 0.98% NA UIL Holdin...
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This note was uploaded on 01/17/2012 for the course ECON 101 taught by Professor Econnorm during the Spring '11 term at Art Institutes Intl. Minnesota.

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