(Valuation of Common Shares): XYZ Inc. has a 11.5% return on equity and retains 55% of its profits for re-investment purposes. Recently he paid a dividend of $ 3.25, and the stock sells at $ 40 currently.
a. What is the growth rate of XYZ?
b. What is the expected rate of return of the shares of XYZ?
c. If you require 13% yield, you should invest in the firm?