The firm Cypress Avenue is a landscaping and garden centre. The company has a policy of retaining
Question:
The firm Cypress Avenue is a landscaping and garden centre. The company has a policy of retaining 40% of its earnings as reinvestment. This policy is expected to continue indefinitely, as is the company’s growth rate of 4%.
If investors require a rate of return in the company of 10%, the P/E of Cypress Avenue should be
a. 10.0
b. 10.4
c. 15.4
d. 20.4
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ISBN: 9781800611474,9781800611498
1st Edition
Authors: Michael Dempsey
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