Question
1. The market capitalization rate for Admiral Motors Company is 9%. Its expected ROE is 12% and its expected EPS is $6. If the firms
1. The market capitalization rate for Admiral Motors Company is 9%. Its expected ROE is 12% and its expected EPS is $6. If the firms plowback ratio is 70%. |
a. | Calculate the growth rate. (Input your answer as a nearest whole percent.) |
b. | what will be its P/E ratio? (Do not round intermediate calculations.) |
2.Miltmar Corporation will pay a year-end dividend of $4, and dividends thereafter are expected to grow at the constant rate of 5% per year. The risk-free rate is 5%, and the expected return on the market portfolio is 12%. The stock has a beta of 0.62. |
a. | Calculate the market capitalization rate. (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
b. | What is the intrinsic value of the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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