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    finance1234 Posts: 6, Reputation: 1
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    Dec 8, 2011, 07:57 PM
    What is the expected growth rate of the firm's net income?
    A firm is 100 equity financed
    10 million shares outstanding
    Does not have any retain earnings
    Expected net income for coming year is 12
    Risk-free interest rate is 7%, beta 0,8 and market risk premium 15 %.
    Common stock is trading in market for 7,06 per share.
    No taxes

    What is the expected growth rate of the firm's net income?

    I have found the expected return is 19 %, but I'm stuck

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