The required rate of return for AT&T, Inc (T) is 14.5%. Its expected ROE is 17.5% and its expected EPS is $2.5. If the firm's retention ratio is 30%, calculate its justified trailing and forward P/E ratios.

Justified trailing P/E = 5.04; Justified forward P/E = 5.22

Justified trailing P/E = 7.57; Justified forward P/E = 7.96

Justified trailing P/E = 13.33; Justified forward P/E = 14.97

Justified trailing P/E = 16.67; Justified forward P/E = 18.8

 

Answer rating: 100% (QA)

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