You Expect That Bean Enterprises Will Have Earnings Per Share

question 90

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
• E)$37.50

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Definitions:

Structural Features

Refers to the inherent characteristics or properties that define the composition or arrangement of a system or entity.

Organizational Structure

The system of tasks, workflows, reporting relationships, and communication channels that dictate how an organization's activities are coordinated and managed.

Production Management

The planning, coordination, and control of industrial processes to ensure that goods are produced efficiently, on time, and within budget.

Specialized Knowledge

Expertise or proficiency in a specific field or area, often acquired through education or extensive experience.