Question
Consider company X with an ROE of 20% and a risk-adjusted discount rate of 15%. The average price-earnings ratio of the companys peers that belong
Consider company X with an ROE of 20% and a risk-adjusted discount rate of 15%. The average price-earnings ratio of the companys peers that belong to the same industry is 8. A manager of company X wants to make its price-earnings ratio the same as the industry average. Then, what is the required plowback ratio?
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Contemporary Issues In Development Finance
Authors: Joshua Yindenaba Abor, Robert Lensink, Charles Komla Delali Adjasi
1st Edition
1138324329, 978-1138324329
