No-Growth Industries pays out all earnings as dividends. The next share will pay out $3 per dividend

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No-Growth Industries pays out all earnings as dividends. The next share will pay out $3 per dividend in one year. Discount rate is 6%.

A. What is the company's price-earnings ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

B. What would the P/E ratio be if the discount rate was 5%? (Round your answer to 2 decimal places.)

Related Book For answer-question

Corporate Finance

ISBN: 978-0077861759

10th edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

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Posted Date: Mar 14, 2023 07:15 AM

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No-Growth Industries pays out all earnings as dividends. The next share will pay out $3 per dividend

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Expert Answer:

A The price of a stock is the present value of all future dividends so we can use the dividend disco... View the full answer

Corporate Finance

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