[Solution] Constant-Growth Model. A stock sells for $40. The next dividend will be $4 per share. If the rate of return earned on reinvested funds is 15%
Question: Constant-Growth Model. A stock sells for $40. The next dividend will be $4 per share. If the rate of return earned on reinvested funds is 15% and the company reinvests 40% of earnings in the firm, what must be the discount rate?
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Rules of Exponents and its Operations - MathCracker.com