Answered step by step
Verified Expert Solution
Question
1 Approved Answer
MF Corp. has an ROE of 16% and a plowback ratio of 50%. If the coming year's earnings are expected to be $4 per share.
MF Corp. has an ROE of 16% and a plowback ratio of 50%. If the coming year's earnings are expected to be $4 per share. The market capitalization rate is 12%, then at what price do you expect MF shares to sell for in three years? You may use the results obtained in Question 8-6 (Do not round intermediate calculations. Round your answer to 2 decimal places.) Question 8 5 pts The market consensus is that Analog Electronic Corporation has an ROE = 9% and a beta of 2.05. It plans to maintain indefinitely its traditional plowback ratio of 1/3. This year's earnings were $3.8 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 15%, and T-bills currently offer a 5% return. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started