Company reinvests 50% of its earning and generate return of 15% of these investment. `CUrrent Dividend 8p and `current D yield is 4%
1) Growth rate in company earning and D=0.08? rite?
2)expected return of shares=12% rite??
3)What will happen to expected return of shares in long run?? no idea
4)SHare P in long run??? constant??
5)In long run equilbrium, the company future investment have dried up and pay out all earning as dividend what happen to the expected return on shares and share price???
I really need help with question 3-5 ???i am struggling for long times already
please advice
Running the considerable risk of being offensive.. but this post made me laugh out loud.. so thanks for that.
Questions 3 to 5 seem to require the use of a crystal ball. Are they part of the equation at all ?
I think the common term used is "remember shares can go up as well as down" ;-)
No offence meant, hope none taken ( I too have had a very trying day)
Chuff
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