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A companys current stock price is 4 pounds. The expected share price in one year is 4.50 pounds. The firm is expected to issue dividends
A companys current stock price is 4 pounds. The expected share price in one year is 4.50 pounds. The firm is expected to issue dividends of 10p at the end of the year, and 12p in two years. The payout ratio is 50 percent. Compute the prospective price-earnings ratio on the stock
a.
66.7 times
b.
20.0 times
c.
40.0 times
d.
33.3 times
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