Accounting/Finance - Stock Question?
Question:
//////////////////////////// Stock X /// Benchmark
Price ---------------> $22.35 /// $1,018.44
Expected EPS ---> $1.12 /// $56.58
Dividend ------------> $0.64 /// $35.34
ROE ----------------> 15.65% /// 14.35%
Answer:
g = retention rate X roe
The payout ratio is .64/1.12, which is 57% The retention rate is 43%.
g = 43% X 15.65%
g = 6.72%
14
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