posted by don on .
Your investment adviser has sent you three analyst reports for a young, growing company named Vegas Chips, Incorporated. These reports depict the company as speculative, but each one poses different projections of the company’s future growth rate in earnings and dividends. All three reports show that Vegas Chips earned $1.20 per share in the year ended previously. There is consensus that a fair rate of return to investors for this common stock is 14 percent, and that management expects to consistently earn a 15 percent return on the book value of equity (ROE = 15 percent).
What is your question?