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
Alexus [3.1K]
3 years ago
10

Even Better Products has come out with an even better product. As a result, the firm projects an ROE of 20%, and it will maintai

n a plowback ratio of 0.03. Its earnings this year will be $2 per share. Investors expect a 12% rate of return on the stock.
Business
1 answer:
TEA [102]3 years ago
6 0

Answer:

Price $17

PE ratio 8.5 times

Explanation:

As per given data

ROE = 20%,

Plowback ratio = b= 0.03,

EPS = $2,

k= 12%

As plowback referr to the retentrion value, deducting its effect from EPS

Dividend= EPS × ( 1 − b ) = $2 × ( 1 −0.03 )= $1.94

Growth = ROE x b = 20% x 0.03 = 0.006 = 0.6%

Using Dividendvaluation method we will calculate the price.

Price  = Dividend  / (Rate of return - Growth rate )

Price  = $1.94  / ( 12% - 0.6% ) = $17

P / E Ratio = Price / EPS = $17 / $2 = 8.5

You might be interested in
Labracorp is looking to hire an unknown number of workers. jim wants to be one of those workers. what information would labracor
lys-0071 [83]
<span>The answer is if Jim's marginal revenue is greater than his marginal cost.
Marginal revenue refers to the value that will Jim give to the company if the company decided to employ Jim. (how much profit he will create for the company)
The marginal cost on the other hand refers to the value that company must sacrifice in order to keep him working (the salary and benefit)</span>
6 0
3 years ago
Read 2 more answers
A flower distributor asked the Fresh Farms sales representative if the company had any red roses in stock. The sales representat
Fynjy0 [20]

Answer:

The correct answer is KISS Rule.

Explanation:

The KISS principle states that most systems work better if they remain simple than if they become complex; Therefore, simplicity should be maintained as a key design objective, and any unnecessary complexity should be avoided.

This principle is registered for the first time in the United States Navy in 1960, and is mainly attributed to Kelly Johnson, chief engineer at Lockheed Skunk Works.

According to FOLDOC, the online dictionary of the Imperial College Department of Computing, possibly has its origin in marketing and sales presentations, to be used later in the development of systems, especially to avoid that the successive developments in the designs are complicated.

5 0
2 years ago
Ichabod Industries has a Latin American Division, a European Division, an Industrial Lubricants Division, and a Food Service Div
Naily [24]

Answer:

Answer is option A i.e. hybrid combination.

Explanation:

A hybrid combination organizational structure can be that is basically the combinations of two or more structures. This is due to the reason that the organization might have a dynamic work environment where people from diversified backgrounds come along to work together.

4 0
3 years ago
What do individual shareholders gain when they buy shares of a company’s stock?
olchik [2.2K]
It will definitely be A
6 0
2 years ago
You purchased 200 shares of ABC stock on July 15th. On July 20th, you purchased another 100 shares and then on July 22st you pur
Mashutka [201]

Answer:

$330

Explanation:

The computation of the dividend income received as on July 31 is shown below:

where,

Total number of shares purchased is

= 100 shares + 200 shares

= 300 shares

And, the dividend per share is $1.10

So, the dividend income received is

= 300 shares × $1.10

= $330

We simply applied the above formula to determine the dividend income received

7 0
3 years ago
Other questions:
  • Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The corporation's net operating income is $11,500
    15·1 answer
  • Can somebody help me?
    12·1 answer
  • To comply with IRS regulations, a taxpayer's mileage log must contain __________. a. Dates the vehicle was used for business; pu
    8·1 answer
  • Economic theory offers ____________________ about the full range of possible events and responses, which can prevent ___________
    15·1 answer
  • Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below: Sales $740,000 V
    13·2 answers
  • Blair Madison Co. issues $2.8 million of new stock and pays $560,000 in cash dividends during the year. In addition, the company
    11·1 answer
  • When a tax is imposed on a good for which the supply is relatively elastic and the demand is relatively inelastic,
    9·1 answer
  • Brestine Inc., a European multinational corporation, wants to expand its customer base and decides to target the Asian market. A
    6·2 answers
  • hi very one!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
    7·2 answers
  • A loan processor who is not required to perform her duties at the direction of or subject to the supervision and instruction of
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!