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QUESTION 8 Sky Company has the payout policy of retaining 40% of its earnings. The ROE for the company is expected to be 25%. The

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QUESTION 8 Sky Company has the payout policy of retaining 40% of its earnings. The ROE for the company is expected to be 25%. The equity beta is estimated to be 1.2. The market risk premium and risk free rate are 5% and 10% respectively. The Po/E1 ratio of the company is A. 30 OB. 16 OC. 10 D.18 O E. 35

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