Question: E14.6. Simple Valuation with Sales Growth Rates (Medium) An analyst forecasts that the current core return on net operating assets of 15.5 percent will continue
E14.6. Simple Valuation with Sales Growth Rates (Medium) An analyst forecasts that the current core return on net operating assets of 15.5 percent will continue indefinitely in the future with a 5 percent annual sales growth rate. She also forecasts that the current asset turnover ratio of 2.2 will persist. Calculate the enterprise price-to-book ratio if the required return for operations is 9.5 percent.
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