Analyzing a company's financial statements, you determine that it has an ROE of 6.50% and a plowback ratio of 10%.

You believe that the CAPM is the correct model to estimate the required return on the company's stock. You find that it has a CAPM beta 1.40, that the market portfolio has a return of 24.50% and that the market portfolio's risk premium is 14.20%.

Using a dividend discounting model, determine the company's trailing P/E Ratio.

Answer rating: 100% (QA)

Okay lets solve this stepbystep ROE 650 Plowback ratio 10 So retentio... View the full answer