Homework Answers
Growth rate = ROE *Retention rate
= 11%*45% = 4.95%
Current dividend = EPS*(1-Retention) = 2.25*(1-45%) = 1.2375
Share price= D0*(1+g)/(k-g)
= 1.2375*(1+4.95%)/(9%-4.95%)
= $32.07
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