Question
Company ABC has a policy of retaining 20% of its earnings as reinvestment. This policy is expected to continue indefinitely, as is the companys growth
Company ABC has a policy of retaining 20% of its earnings as reinvestment. This policy is expected to continue indefinitely, as is the companys growth rate of 5%. If investors require a rate of return in the company of 10%, the P/E of the firm ABC should be
(a) 10.0
(b) 10.4
(c) 16.8
(d) 20.
how to get 16.8
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Fundamentals Of Financial Management
Authors: Richard Bulliet, Eugene F Brigham, Brigham/ Houston
11th Edition
1111795207, 9781111795207
