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Suppose a Firm's Price/earnings Ratio Is 16

Question 75

Multiple Choice

Suppose a firm's price/earnings ratio is 16.It has just paid a dividend of $1.80 per share to maintain a 45 percent payout ratio.What is the firm's current market price if its return on equity is 12 percent?


A) $68.22
B) $67.46
C) $66.54
D) $65.78

Correct Answer:

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