Question
#1) A) Calculate the price of a firm with a plowback ratio of .5 if its ROE is 10%. Its current earnings, E 1 are
#1)
A) Calculate the price of a firm with a plowback ratio of .5 if its ROE is 10%. Its current earnings, E1 are $4 per share and k = 10%
B) If the ROE for this same firm was 8% instead of 10%, with all the other information the same, what would the intrinsic price of the stock be?
C) If the ROE was 8% and the plowback ratio was changed to 0.0 what would the intrinsic price of the stock be?
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Global Corporate Finance A Focused Approach
Authors: Kenneth A. Kim
1st Edition
9814335827, 9789814335829
