You Expect That Bean Enterprises Will Have Earnings Per Share

question 17

Multiple Choice

You expect that Bean Enterprises will have earnings per share of $2 for the coming year.Bean plans to retain all of its earnings for the next three years.For the subsequent two years,the firm plans on retaining 50% of its earnings.It will then retain only 25% of its earnings from that point forward.Retained earnings will be invested in projects with an expected return of 20% per year.If Bean's equity cost of capital is 12%,then the price of a share of Bean's stock is closest to:

• A)$17.00
• B)$10.75
• C)$27.75
• D)$43.50

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Definitions:

Mistaken Identity

An error in recognizing a person or thing for someone or something else, which can sometimes lead to wrongful accusations or judgments.

Work-Related Stress

Stress experienced by employees due to various factors in the workplace, including workload, pressure to perform, and work environment.

Performance Expectations

Standards or criteria set by an organization or manager to evaluate an employee's job performance.

Individual Contributor

refers to an employee who contributes to their organization through their individual skills and effort rather than by managing others.