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I need help with this question> Expected earnings per share $20 Deakin's market beta 0.8 Earnings per share to be retained by the firm 30%
I need help with this question>
Expected earnings per share $20
Deakin's market beta 0.8
Earnings per share to be retained by the firm 30%
Growth rate in earnings per share7% p.a.
1. Calculate the P/E ratio if the expected return on the ASX300 is 12% p.a. and the return on 10 year Commonwealth Government Bonds is 4% p.a. What does this ratio tell you?
2. Calculate the share price using P/E ratio calculated in Part 1.
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