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  3. today is year 2021 (t=0) earnings = 100 million (t

today is year 2021 (t=0) Earnings = 100 million (t=1). if the firm spends 30%...

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Finance

today is year 2021 (t=0) Earnings = 100 million (t=1). if the firm spends 30% on dividends and the rest (100%-30%) to reinvest on new projects. The firm is expected to maintain this ratio of dividend payout and reinvestment rate for the years after. Every new project has the return of 10%. If rate of return is 15% and the number of share in market is 10million. what is the share price of this firm?

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