Calculate the justified forward P/E ratio for a company with the following characteristics: Dividend payout ratio...
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Calculate the justified forward P/E ratio for a company with the following characteristics: Dividend payout ratio = 40% Dividend growth rate = 3% Cost of equity = 8% What is the justified forward P/E ratio? If the company's management decides to increase the dividend payout ratio to 50%, what is the new justified forward P/E ratio? Calculate the justified forward P/E ratio for a company with the following characteristics: Dividend payout ratio = 40% Dividend growth rate = 3% Cost of equity = 8% What is the justified forward P/E ratio? If the company's management decides to increase the dividend payout ratio to 50%, what is the new justified forward P/E ratio?
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Answer rating: 100% (QA)
The justified forward PE ratio is calculated using the Gordon Growth Model also known as the Dividen... View the full answer
Related Book For
Valuation The Art and Science of Corporate Investment Decisions
ISBN: 978-0133479522
3rd edition
Authors: Sheridan Titman, John D. Martin
Posted Date:
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