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Pissu, Inc., a technology company's share price is $50 per share; earnings and dividends are $5.10 a share, and the growth rate is zero.
Pissu, Inc., a technology company's share price is $50 per share; earnings and dividends are $5.10 a share, and the growth rate is zero. The new management of the company thinks that it can grow even in a tough, competitive market. They have just announced a new growth strategy whereby the company's earnings would begin growing by 7% per year and remain stable at this new rate. This new growth strategy will require the company to reinvest 35% of their earnings starting at the end of this year (t = 1). What will happen to the price per share of this company?
