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A corporation has plowed back 60 per cent of the after tax result in the last years, and is willing to keep that policy further

A corporation has plowed back 60 per cent of the after tax result in the last years, and is willing to keep that policy further on. Next year earnings per share is forecasted to HUF 840. ROE measure for the corporation has been for a longer term around 20 per cent. Expected rate of return is 16 per cent p.a.

  1. What is the theoretical price of the share?
  2. Would it be worthy to buy this share if current price is HUF 8,175?
  3. Based on the current price what is the recent P/E ratio of the company?
  4. What is the long-term return of the share?
  5. What is the short-term return of the share when the shareholder can sell it for HUF 7,500 or HUF 8,500 in a year?
  6. What would be the market value if they would paid out the whole amount of the EPS?
  7. What is the PVGO?

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