Currently, the dividend-payout ratio (D/E) for the aggregate market is 55 percent, the required return (k) is
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Currently, the dividend-payout ratio (D/E) for the aggregate market is 55 percent, the required return (k) is 9 percent, and the expected growth rate for dividends {g) is 4 percent.
a. Compute the current earnings multiplier.
b. You expect the DIE payout ratio to decline to 40 percent, but you assume there will be no other changes. What will be the P/E?
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Related Book For
Investment Analysis and Portfolio Management
ISBN: 978-1305262997
11th Edition
Authors: Frank K. Reilly, Keith C. Brown, Sanford J. Leeds
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