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Home > Money & Services > Investing   »   constant growth model

 
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Old Jun 20, 2007, 05:43 PM
atapprich
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constant growth model

two stocks both have discount rates of 15%

Stock A Stock B
return on equity 15% 10%
earnings per share $2.00 $1.50
dividends per share $1.00 $1.00

a. what are the dividend payout ratios for each firm
b. what are the expected dividend growth rates for each firm
c. what is the proper stock price for each firm

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