Question
Question: Fire Side Limited (FSL) is projected to have earnings per share (EPS) of $3.50 next year, and the firms dividends are 30% of earnings.
Question:
Fire Side Limited (FSL) is projected to have earnings per share (EPS) of $3.50 next year, and the firms dividends are 30% of earnings. Investors have a required return on FSL shares of 12.4%. The company has a profit margin of 10%, total asset turnover of 0.9, and total debt ratio of 0.4.
1. Calculate the ROE of the company.
2. Calculate the price of FSL shares.
3. How much of that price is due to future growth opportunities?
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Investments An Introduction
Authors: Herbert B. Mayo
13th Edition
0357127951, 978-0357127957
