Question: A companys current ROE is 12 per cent. An analyst assumes the company ROE will grow indefinitely at a rate of 2 per cent. The

A companys current ROE is 12 per cent. An analyst assumes the company ROE will grow indefinitely at a rate of 2 per cent. The cost of equity is 10 per cent. Under these assumptions, what is the estimated equity value-to-book multiple of this company?

1.00

1.10

1.12

1.25

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