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A Company Can Generate an Return on Equity (ROE) of 12

Question 4

Essay

A company can generate an return on equity (ROE) of 12% and has an earnings retention ratio of 0.80. Next year's earnings are projected at $100 million. If the required rate of return for the company is 10%, what is the company's tangible P/E value, franchise factor, growth factor, and franchise
P/E value?

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The company's tangible P/E value is 1/r ...

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