A company currently retains 40% of its earnings, which amounts to R6 per share this year. It earns an ROE of 30%. Assuming a required rate of return of 16%, how much would you pay for shares in the company on the basis of the earning multiplier model?

Answer rating: 100% (QA)

To calculate the price of shares in the company based on the earnings multiplier model we can use th... View the full answer