Dalton Inc. has a return on equity of 10.7 percent and retains 52 percent of its earnings for reinvestment purposes. It recently paid a dividend of $2.75 and the stock is currently selling for $38.  a. What is the growth rate for Dalton Inc?

Dalton Inc. has a return on equity of 10.7 percent and retains 52 percent of its earnings for reinvestment purposes. It recently paid a dividend of $2.75 and the stock is currently selling for $38. a. What is the growth rate for Dalton Inc?

Dalton Inc. has a return on equity
of 10.7 percent and retains 52 percent of its earnings for reinvestment
purposes. It recently paid a dividend of $2.75 and the stock is currently
selling for $38.

a. What
is the growth rate for Dalton Inc?

b. What
is the expected return for Dalton’s stock?

c. If
you require a 14 percent return, should you invest in the firm?


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