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Author Question: James is willing to settle for a 10% rate of return on EG stock at a time when investors, on ... (Read 12 times)

rubiosusy7

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Question 1

In general, the higher the retention ratio
◦ the higher the future growth rate of the company.
◦ the higher the dividends per share of common stock.
◦ the higher the future debt-equity ratio.
◦ the lower the future book value per share.

Question 2

James is willing to settle for a 10% rate of return on EG stock at a time when investors, on average, are requiring an 11% rate of return on the same stock. Which of the following will happen?
◦ James will have to pay more for the stock than he was willing to pay.
◦ Investors with different required rates of return will pay different prices for the stock.
◦ James will not be able to buy the stock unless the price changes.
◦ James will be happy to buy the stock for less than he was willing to pay.


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Marked as best answer by rubiosusy7 on Mar 29, 2022

xinyiff

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rubiosusy7

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Reply 2 on: Mar 29, 2022
YES! Correct, THANKS for helping me on my review


AngeliqueG

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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