Suppose that the consensus forecast of security analysts of your favorite company is that earnings next year will be $5.00 per share. The company plows back 50% of its earnings and if the Chief Financial Officer (CFO) estimates that the company's return on equity (ROE) is 16%. Assuming the plowback ratio and the ROE are expected to remain constant forever: If you believe that the company's required rate of return is 10%, what is your estimate of the price of the company's stock?

$250

Step-by-step explanation:

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid

r = cost of equity

g = growth rate

Sustainable growth rate is the rate of growth a company can afford in the long term

sustainable growth rate = plowback rate x ROE

b = plowback rate. It is the portion of earnings that is not paid out as dividends

g = 0.50 x 0.16 = 0.08 = 8%

5 / (10% - 8%)

5 / 2%

5 / 0.02 = $250

answer: all of the odd numbers were opened

the first person was the one that was opening all of the lockers. since one is odd, this causes all of the odd number lockers to be opened in the end.

i think 5 miles per hour

step-by-step explanation: