Question

INV Design Ltd. just paid a dividend of $4.00 and its current earnings per share is $5. The current T-bill rate is 3 percent and DE’s risk premium is 12 percent. The net profit margin, asset turnover, and debt-to-equity (D/E) ratio are 20 percent, 1.5, and 0.67, respectively. Calculate the current share price by using the P/E ratio approach.



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  • CreatedFebruary 25, 2015
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