3. Mando Inc. next year earnings per share is expected to be $7. Its return on equity is 20%, which is expected to remain for the foreseeable future. The market required return is 12%. a. Mando Inc. maintains an 80% dividend payout ratio. Calculate the Mando Inc. stock price and NPVGO. b. Calculate Mando Inc. stock price and NPVGO if Mando Inc. management chooses an 95% dividend payout policy.
3. Mando Inc. next year earnings per share is expected to be $7. Its return on equity is 20%, which is expected to remain for the foreseeable future. The market required return is 12%. a. Mando Inc. maintains an 80% dividend payout ratio. Calculate the Mando Inc. stock price and NPVGO. b. Calculate Mando Inc. stock price and NPVGO if Mando Inc. management chooses an 95% dividend payout policy.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 2MAD
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