eBook

Problem 8-12

Assume that a company has an ROE of 19 percent, a growth rate of 4 percent, and a payout ratio of 62 percent. The company also has a cost of equity of 12 percent.

1. What is the forward pricebook multiple?

   -Select-The forward P/B Multiple is 1.65.The forward P/B Multiple is 0.08.The forward P/B Multiple is 1.47.The forward P/B Multiple is not forecast by analysts.Item 1 .

2. What is the trailing pricebook multiple?

   -Select-The trailing P/B Multiple is 1.47.The trailing P/B Multiple is 0.08.The trailing P/B Multiple is 1.53.The trailing P/B Multiple is not forecast by analysts.Item 2 .