Question
3.1 A firm projects an ROE of 18%; it will maintain a payout ratio of 40%. The firm is expecting earnings of R3 per share
3.1 A firm projects an ROE of 18%; it will maintain a payout ratio of 40%. The firm is expecting earnings of R3 per share and investors expect a return of 15% on the investment. Calculate the expected share price and the P/E ratio of the firm. (10)
3.2 Discuss if gearing affect share price and weighted average cost of capital. (10)
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Restaurant Financial Management
Authors: Hyung-il Jung
1st Edition
1774631431, 978-1774631430
