Question
No-Growth Industries pays out all of its earnings as dividends. It will pay its next $6 per share dividend in a year. The discount rate
No-Growth Industries pays out all of its earnings as dividends. It will pay its next $6 per share dividend in a year. The discount rate is 21%.
| a. | What is the price-earnings ratio of the company? (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| P/E ratio |
| b. | What would the P/E ratio be if the discount rate were 20%? (Round your answer to 2 decimal places.) |
| P/E ratio |
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CFP Board Financial Planning Competency Handbook
Authors: CFP Board
2nd Edition
1119094968, 978-1119094968
