Question
A company can generate an ROE of 30 percent and has an earnings retention rate of 0.25. Next year's earnings are projected at $1,000,000 million.
A company can generate an ROE of 30 percent and has an earnings retention rate of 0.25. Next year's earnings are projected at $1,000,000 million. If the required rate of return for the company is 12.5 percent, how much is the company's intrinsic P/E value? Round your answer to the nearest integer.
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Introductory Econometrics For Finance
Authors: Chris Brooks
4th Edition
110843682X, 9781108436823
