What is qs stock worth per share


Problem

Company Q's current return on equity (ROE) is 15%. It pays out 20 percent of earnings as cash dividends. Current book value per share is $60. Book value per share will grow as Q reinvests earnings.

Assume that the ROE and payout ratio stay constant forever.
The cost of capital is 20.0%.

What is Q's stock worth per share?

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