Question
a. MF Corp. has an ROE of 14% and a plowback ratio of 40%. If the coming year's earnings are expected to be $2 per
| a. | MF Corp. has an ROE of 14% and a plowback ratio of 40%. If the coming year's earnings are expected to be $2 per share, at what price will the stock sell? The market capitalization rate is 12%. (Round your answer to 2 decimal places. Do not round intermediate calculations.) |
| Price | $ |
| b. | What price do you expect MF shares to sell for in three years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| Price | $ |
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International Financial Management
Authors: Geert Bekaert, Robert Hodrick
3rd edition
1107111820, 110711182X, 978-1107111820
