New Wheat Co. institutes a new dividend policy which causes 70% of earnings to be paid out in all future years and the r

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answerhappygod
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New Wheat Co. institutes a new dividend policy which causes 70% of earnings to be paid out in all future years and the r

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New Wheat Co. institutes a new dividend policy which causes 70%
of earnings to be paid out in all future years and the remained to
be invested in new projects that will grow firm earnings. The
required rate of return for New Wheat is estimated at 10%. If New
Wheat were to earn $4.00 per share next year with an ROE of 18%,
what would be the intrinsic value of a share of this firm's
stock?
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