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 remaineder
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 in dollars and cents?
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