I pulled DPS and EPS from value line under 1997. Then to find the retention rate, I subtracted the ratio from 1. Next, I calculated r, by taking net income and dividing it by net worth. These figures I also pulled from Value Line. My b= .352, and r=28.68%. Then the third growth rate was 10.10(.352*28...
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Then the third growth rate was 10.10(.352*28.68). Still calculating the cost of retained earnings, I then calculated my cash flows by the discounted cash flow approach. For the first three cash flows, I took the dividend of the stock over the price of the stock, and then added the growth rate to it...
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