1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Ne4ueva [31]
2 years ago
9

The market capitalization rate on the stock of Aberdeen Wholesale Company is 10%. Its expected ROE is 12%, and its expected EPS

is $5. If the firm's plowback ratio is 60%, its P/E ratio will be ________. Group of answer choices 22.22 7.14 16.67 14.29
Business
1 answer:
Shalnov [3]2 years ago
5 0

The Price-earnings ratio of Aberdeen Wholesale Company equals to 14.29.

<h3>What is a P/E ratio?</h3>

Its means the Price-earnings ratio which is used to value a companies by comparing the company's share price to its earnings per share.

<u>Given data</u>

Market capitalization rate = 10%

Expected ROE = 12%

Expected EPS = $5

Plowback ratio is 60%

<h3>What is the Dividend payout ratio?</h3>

= 1 - 0.6

= 0.4

<h3>What is the Expected dividend?</h3>

= 0.4 × $5

= $2

<h3>What is the Growth rate?</h3>

= 0.6 * 12%

= 7.2%

<h3>What is the Firm Value?</h3>

= $2 / (0.10 - 0.072)

= $2 / 0.028

= $71.43

<h3>What is the P/E ratio?</h3>

= $71.43 / $5

= 14.286

= 14.29

Hence, the Price-earnings ratio of Aberdeen Wholesale Company equals to 12.5.

Therefore, the Option D is correct.

Read more about Price earnings ratio

<em>brainly.com/question/14690388</em>

You might be interested in
In your own words, discuss GAP management and then suggest a way to reduce the impact of its limitation. Do not duplicate limita
vichka [17]

Answer:

Gap management is a strategy which every business follows. A business can be successful only if it sets goals for its future.

Explanation:

Gap management is the difference between where an organization stands today and where it wants to be in future. A company's management will set its own targets and then sets position of the company. There are limitation of gap management as there can be targets which are sometimes unachievable or there are some external forces which hinders the business progress.

5 0
3 years ago
You have an opportunity to invest in Australia at an interest rate of 8%. Moreover, you expect the Australian dollar (A$) to app
earnstyle [38]

Answer:

10.16%

Explanation:

The computation of the effective return for this investment is shown below:

Let us assume that we invested an amount in Australian dollars 100

The return is 8%

After one year, the amount is 108

Now the converting amount is 110.16 (108 × 102%)

Now the effective rate for this investment is

= 110.16 - 100

= 10.16%

7 0
3 years ago
A term that is not synonymous with property, plant, and equipment is
Murljashka [212]

Answer:

4. intangible assets.

Explanation:

Total assets are classified into current assets, fixed assets, and intangible assets.

Current assets comprise cash, stock, receivable account, etc.  

Fixed assets include plant & machinery, property, facilities, furniture & equipment, etc.

And, the intangible assets are patents, copyrights, goodwill, and other intellectual properties plus they are not seen or even touched.

Whereas the fixed assets or other related synonymous are tangible in nature

6 0
3 years ago
The McDonaldization of society refers to the:
puteri [66]

Answer:

A)

Explanation:

obesity epidemic in American society increased uniformity and rationality of society

6 0
3 years ago
The recovery time objective (RTO) downtime metric is the defined as the point in time to which lost systems and data can be reco
Elena L [17]

Answer:

False

Explanation:

 Recovery time objective(RTO) - The main objective of RTO is to work on the real-time designation.  It works to define lost or re-entered data during the downtime of the network. The purpose of RTO is to define the actual working time before a disturbance begins.

It defined to that time period during which the unprocessed process can be recovered after the disturbance occurs during any business operation.

8 0
3 years ago
Other questions:
  • It has been estimated that there are 107 billion pieces of mail per year. if the postage rates are raised 3¢, how much extra rev
    8·1 answer
  • If omar company applies overhead to jobs on the basis of direct labor hours and job 3 took 120 hours, how much overhead should b
    12·1 answer
  • The price of apples has recently fallen in the marketplace. From this information, we can safely predict that: a.a shortage of a
    13·1 answer
  • Al files for bankruptcy. Al has been making loan payments to his company's credit union through payroll deductions. After being
    10·1 answer
  • Which of the following best describes why German firms were nationalized after World War II?
    8·1 answer
  • What are the two kinds of business or organizational structure?​
    5·1 answer
  • Dave is a close-up magician who is famous for his card tricks. He creates and sells DVDs of his magic tricks. Lately he has been
    5·1 answer
  • Where is Nova City Islamabad located? Also is it under progress or has the development been completed?
    13·1 answer
  • Which of the following are NOT needed to calculate cost of goods sold
    14·1 answer
  • when the market rate is 8%, a company issues $50,000 of 9%, 10-year bonds and pay interest semiannually for a selling price of $
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!