A firm is expected to produce earnings next year of $3 per share. It plans to reinvest 25% of its earnings at 20%. If the cost of equity is 11%, what should be the value of the stock? A. $70.
B. $37.50.
C. $66.67.
D. $27.27.

B.37.50

Explanation:

Calculation for what should be the value of the stock

First step is to calculate g

g = .25 × .20

g= .05

Second step is to calculate D1

D1 = $3(1 - .25)

D1= $2.25

Last step is to calculate what should be the value of the stock

P0 = $2.25/(.11 - .05)

P0 = $37.50

Therefore what should be the value of the stock is $37.50

the correct answer is:

it required the president to inform congress within forty-eight hours of any new troop commitment.

the war powers resolution (1973) is a federal law designed to limit the u.s. president’s ability to initiate or intensify military actions abroad without the approval of the congress.

it establishes that the president can send armed forces into action abroad only by declaration of war by congress, statutory authorization, or in case of a national emergency created by attack upon the united states, its territories or possessions, or its armed forces.

it requires the president to notify congress within 48 hours of sending armed forces to military action.

answer; no individual buyer or seller has any significant impact on the market price;