Multiple Choice
You expect KT industries (KTI) will have earnings per share of $5 this year and expect that they will pay out $2.50 of these earnings to shareholders in the form of a dividend. KTI's return on new investments is 14% and their equity cost of capital is 11%. The value of a share of KTI's stock today is closest to ________.
A) $75.00
B) $37.50
C) $62.50
D) $25.00
Correct Answer:
Verified
Correct Answer:
Verified
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