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5) Question 5 4 pts The stock price of Macrosoft Inc is $62. Its P/E ratio is 47. The market P/E ratio (S&P 500) is
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Question 5 4 pts The stock price of Macrosoft Inc is $62. Its P/E ratio is 47. The market P/E ratio (S&P 500) is 24. Many in the financial media and many analysts were suggesting that the P/E ratio is too high. Macrosoft is expected to generate 17%/yr growth in the next five years. The growth in EPS for the market (S&P 500 stocks) is expected to average 13% per year. Macrosoft pays no dividend and the dividend yield for the market is 2%. How long must Macrosoft earnings grow at 17% per year to justify the P/E ratio of 47? O 55 O 39 0 24.5 19.3 Step by Step Solution
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