Company X is a no growth firm. It is expected to provide a constant earnings per share of $30. If all earnings are paid out as dividends and the required rate of return on equity is 15%, calculate the current price per share for the stock.
e) Not enough information to answer the question
f) There is enough information provided but none of the answers above is correct.
We know that Net present value of growth opportunities can be calculated as: NPVGO = P1 - EPS / r where P1 is the current share ...
The solution calculate the price per share of a no growth firm with constant earnings all paid out.