INV Design Ltd. just paid a dividend of $4.00 and its current earnings per share is $5.

Question:

INV Design Ltd. just paid a of $4.00 and its current earnings per share is $5. The current T-bill rate is 3 percent and DE’s risk premium is 12 percent. The net profit margin, asset turnover, and debt-to-equity (D/E) ratio are 20 percent, 1.5, and 0.67, respectively. Calculate the current share price by using the P/E ratio approach.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...