USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The Valentine Company currently has a 14 percent annual growth rate, while the market average is 4 percent. The market multiple is 15.
-Refer to Exhibit 9.13. Determine the justified P/E ratio for the Valentine Company assuming Valentine can maintain its superior growth rate for the next 10 years.
A) 3.0
B) 9.2
C) 16.6
D) 28.6
E) 37.6

Question

Quizplus · Accepted Answer

The Answer of USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The Valentine Company currently has a 14 percent annual growth rate, while the market average is 4 percent. The market multiple is 15.
-Refer to Exhibit 9.13. Determine the justified P/E ratio for the Valentine Company assuming Valentine can maintain its superior growth rate for the next 10 years.
A) 3.0
B) 9.2
C) 16.6
D) 28.6
E) 37.6