You Expect That Bean Enterprises Will Have Earnings Per Share

question 31

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 Enterprises is closest to:

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

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Definitions:

Authentic Emotions

Refers to genuine feelings that are experienced and expressed without pretense or artificial influence.

Inauthentic Expression

The act of expressing emotions, thoughts, or feelings that do not genuinely reflect one's true state or beliefs.

Facial Feedback

The hypothesis that facial expressions can influence emotional experiences.

Cultural Rules

Norms and expectations that govern behaviors within specific societies or groups, influencing how individuals act and interact.