Question
TAR has come out with a new and improved product. As a result, the firm projects an ROE of 20%, and it will maintain a
TAR has come out with a new and improved product. As a result, the firm projects an ROE of 20%, and it will maintain a plowback ratio of 0.20. Its earnings this year will be $3 per share. Investors expect a 12% rate of return on the stock. At what P/E would you expect TAR to sell?
30
2.5
20
10
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Introduction To Derivatives And Risk Management
Authors: Robert Brooks, Don M Chance
9th Edition
1133190197, 978-1133190196
