Question
Good Products has come out with a new and improved product. As a result, the firm projects an ROE of 20%, and it will maintain
Good Products has come out with a new and improved product. As a result, the firm projects an ROE of 20%, and it will maintain a plowback ratio of .30. Its earnings this year will be $2 per share. Investors expect a 12% rate of return on the stock.
At what price and P/E ratio would you expect the firm to sell? (P/E ratio is a ratio of price per share over earnings per share)
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Financial Accounting Essentials You Always Wanted To Know Self Learning Management Series
Authors: Vibrant Publishers , Kalpesh Ashar
5th Edition
1636510973, 978-1636510972
