1
a. 8.33
b. 11.43
c. 14.29
d. 15.25

1 Answer

2

Answer:

b. $11.43

Explanation:

g = 25% * 0.20

g = 0.05

g = 5%

D1 = 3 * (1 - 0.2)

D1 = 3 * 0.8

D1 = $2.40

Price = D1 / Expected RR - g

Price = 2.40 / 0.12 - 0.05

Price = 2.40 / 0.07

Price = 34.28571428571429

Price = 34.30

P/E Ratio = Price / Earning per share

P/E Ratio = $34.30/$3

P/E Ratio = 11.43333333333333

P/E Ratio = $11.43

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River Hamill
15.5k 3 10 26
answered 1 year ago