Company ABC has a policy of retaining 20% of its earnings as reinvestment. This policy is expected
Fantastic news! We've Found the answer you've been seeking!
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 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
Expert Answer:
Posted Date:
