Silicon Valley Electronics (SVE)is expected to pay out 40% of its earnings and to earn an average return of 15% per year forever on its reinvested earnings.Stocks with similar characteristics are priced to return 12% to investors.By what percentage can SVE's earnings per share be expected to grow each year? What is the appropriate P/E ratio for the stock? What portion of SVE's total yield is likely to come from capital gains? What portion will come from dividend yield?

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The Answer of Silicon Valley Electronics (SVE)is expected to pay out 40% of its earnings and to earn an average return of 15% per year forever on its reinvested earnings.Stocks with similar characteristics are priced to return 12% to investors.By what percentage can SVE's earnings per share be expected to grow each year? What is the appropriate P/E ratio for the stock? What portion of SVE's total yield is likely to come from capital gains? What portion will come from dividend yield?

Silicon Valley Electronics (SVE)is Expected to Pay Out 40% of Its