(Common stock valuation) Wayne, Inc.'s outstanding common stock is currently selling in the market for $53. Dividends of $3.25 per share were paid last year, return on equity is 29 percent, and its retention rate is 29 percent. a. What is the value of the stock to you, given a required rate of return of 16 percent? b. Should you purchase this stock? a. Given a required rate of return of 16 percent, the value of the stock to you is $. (Round to the nearest cent.)

(Common stock valuation) Wayne, Inc.'s outstanding common stock is currently selling in the market for $53. Dividends of $3.25 per share were paid last year, return on equity is 29 percent, and its retention rate is 29 percent. a. What is the value of the stock to you, given a required rate of return of 16 percent? b. Should you purchase this stock? a. Given a required rate of return of 16 percent, the value of the stock to you is $. (Round to the nearest cent.)

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Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 4P

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