Question
Calculate the justified forward P/E ratio for a company with the following characteristics: Dividend payout ratio = 40% Dividend growth rate = 3% Cost
Calculate the justified forward P/E ratio for a company with the following characteristics: Dividend payout ratio = 40% Dividend growth rate = 3% Cost of equity = 8% What is the justified forward P/E ratio? If the company's management decides to increase the dividend payout ratio to 50%, what is the new justified forward P/E ratio?
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Valuation The Art and Science of Corporate Investment Decisions
Authors: Sheridan Titman, John D. Martin
3rd edition
133479528, 978-0133479522
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