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Goryan [66]
3 years ago
15

Tayco Corporation has just paid dividends of $3 per share. The earnings per share for the company was $4. If you believe that th

e appropriate discount rate is 15 percent and the long-term growth rate in dividends is 6 percent, and earnings is 6 percent, then the firm's P/E ratio is
Business
1 answer:
tino4ka555 [31]3 years ago
8 0

Answer:

the price earning ratio is 8.33

Explanation:

The computation of the price earning ratio is shown below:

P/E Ratio is

= share price ÷  Earning Per share

where,

The price of a share is

= 3 × 106

= $3.18

And, the earning per share is

= $4 × (1.06) ÷ (0.15 - 1.06)

So, the price earning ratio is

= (3 × (1.06) ÷  4(1.06)÷ (0.15 -0.06))

= 8.33

Hence, the price earning ratio is 8.33

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Answer:

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Parrot’s basis in the land is $8,000, as same basis the donor had.  

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