Calculate the expected earnings growth rate calculate the, Financial Management

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Calculate the expected earnings growth rate calculate the

Stock XYZ has a ROE of 10% and a dividend payout ratio of 80%. The firm has a beta of 1.3. Assume an equity risk premium of 6% and a risk free rate of 2.5%.

a. Calculate the expected earnings growth rate.

b. Calculate the cost of equity.

c. Calculate the justified leading P/E Ratio of Stock XYZ using the constant growth dividend discount model.

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Financial Management: Calculate the expected earnings growth rate calculate the

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