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Suppose a Firm Has Just Reported an EPS of $4

Question 101

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Suppose a firm has just reported an EPS of $4.55 and expects to maintain a dividend payout ratio of 48%.The firm's price-earnings ratio is 11 and its return on equity is 17.36%.
a)What is current dividend?
b)What is growth rate?
c)What is current share price?
d)What is its required rate of return?

Correct Answer:

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a)D0=EPS* payout ratio=4.55*0.4...

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