Non-depreciating assets, Will-O-Wind Airlines always

Non-depreciating assets

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Reference no: EM13885327

Will-O-Wind Airlines always invests (in non-depreciating assets) 20% of its earnings, which will be next period (Period 1) $3 per share. The rest it pays out as dividends. Its investment opportunities currently earn (and are expected to earn in the indefinite future) 18%. There are no taxes. The risk adjusted required rate of return on this stock is 10%. What is its price?

Reference no: EM13885327

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