Question
a. MF Corp. has an ROE of 15% and a plowback ratio of 20%. If the coming year's earnings are expected to be $2 per
| a. | MF Corp. has an ROE of 15% and a plowback ratio of 20%. 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 7%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| 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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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
14th edition
007745443X, 978-0073530727, 73530727, 978-0077454432
