Question: Assume that P/E ratios are computed using current price and expected earnings (rather than current earnings), and that all earnings and dividend values are annual

Assume that P/E ratios are computed using current price and expected earnings (rather than current earnings), and that all earnings and dividend values are annual values. (SHOW ALL CALCULATIONS, NO EXCEL FUNCTIONS)Assume that P/E ratios are computed using current price and expected earnings

7. The required rate of return for a firm is 12%, its dividend growth rate is 5% and its plowback ratio is 40%. 4 pts a. What is the firm's price earnings ratio? b. What is the firm's ROE on investment opportunities

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