Q$5)$ Financial Ratios

a$)$ The company stock price is $P=$$$20$ per share. Company Earnings are $E_0=$$$5$ per share and

expected to grow at a rate of $g=3\%.$ What is the company $\frac{P}{E_1}?$

b$)$ The plowback rate for a company is $b=0\mathrm{.}65.$ The growth rate and market capitalization rate

are $g=3\%$ and $k=8\%$ respectively. What is the company $\frac{P}{E_1}?$

c$)$ A company has an annual income of $$2,500,000$ and average shareholder's equity of

$$15,000,000.$ What is the ROE for the company?

d$)$ A company has a tax rate of $t=25\%,$ROA$=10\%,$ and pays interest of $i=8\%.$ The debt$-$to$-$

equity rate is $\frac{2}{3}.$ What is the ROE of the company?

e$)$ A company has a tax rate of $t=20\%,$ROE$=18\%,$ and pays interest of $i=4\%.$ The debt$-$to$-$

equity rate is $\frac{3}{4}.$ What is the ROA of the company?