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 the earnings in the firm, what must be the discount rate?

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 the earnings in the firm, what must be the discount rate?

Hi, Fletchv!

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Thanks!