The XYZ Company (an all-equity firm) currently has after-tax operating cash flows of Ksh.3.00 per share and pays out 50% of its earnings in dividends. If it expects to keep the same payout ratio, and earn 20% on future investments forever, what will its current price per share be? Assume that the cost of capital is 15%.

The XYZ Company (an all-equity firm) currently has after-tax operating cash flows of Ksh.3.00 per share and pays out 50% of its earnings in dividends. If it expects to keep the same payout ratio, and earn 20% on future investments forever, what will its current price per share be? Assume that the cost of capital is 15%

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