Suppose a firm has just reported an EPS of $2.50 and expects to maintain a dividend payout ratio of 40 percent.What is the firm's price-earnings ratio if its return on equity is 12 percent and the required return is 11.5 percent?
A) 11.50
B) 9.30
C) 7.20
D) 5.97
Correct Answer:
Verified
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