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
jenyasd209 [6]
3 years ago
5

ART has come out with a new and improved product. As a result, the firm projects an ROE of 25%, and it will maintain a plowback

ratio of 0.20. Its earnings this year will be $3 per share. Investors expect a 12% rate of return on the stock. At what P/E ratio would you expect ART to sell?
a. 8.33
b. 11.43
c. 14.29
d. 15.25
Business
1 answer:
Marianna [84]3 years ago
7 0

Answer:

b. $11.43

Explanation:

g = 25% * 0.20

g = 0.05

g = 5%

D1 = 3 * (1 - 0.2)

D1 = 3 * 0.8

D1 = $2.40

Price = D1 / Expected RR - g

Price = 2.40 / 0.12 - 0.05

Price = 2.40 / 0.07

Price = 34.28571428571429

Price = 34.30

P/E Ratio = Price / Earning per share

P/E Ratio = $34.30/$3

P/E Ratio = 11.43333333333333

P/E Ratio = $11.43

You might be interested in
11. (-/1 Points] DETAILS BRECMBC9 5.11.010.
Lisa [10]

Answer:

2190 ; 2560 ;

$778.2

Explanation:

Total worth of gasoline sold = 16003.50

Cost of regular = 3.30

Cost of premium = 3.45

Let :

premium Gallon sold = x

Regular gallon sold = 370 + x

Hence, mathematically;

(3.45*x) + (3.30 * (x + 370)) = 16003.50

3.45x + 3.30x + 1221 = 16003.50

6.75x = 16003.50 - 1221

6.75x = 14782.5

x = 14782.5 / 6.75

x = 2190

Premium Gallon sold = 2190 gallons

Regular gallon sold = 2190 + 370 = 2560 gallons

Profit per regular gallon sold = $0.15

Progit per premium Gallon sold = $0.18

Total profit = (2190 * 0.18) + (2560 * 0.15) = $778.2

7 0
3 years ago
A(n) ____________ portfolio maximizes return for a given level of risk, or minimizes risk for a given level of return.
Anastaziya [24]

An efficient portfolio maximizes return for a given level of risk or minimizes risk for a given level of return.

Having an efficient portfolio when preparing a financial planning is undeniably important as this helps you in your decision-making; whether you engage in something while knowing the specific risk of doing that certain action.

8 0
3 years ago
What is a value that can be used to ensure that hashed plaintext will not consistently result in the same digest?
ch4aika [34]
Salt is the term used in cryptography that defines a value that can be used to ensure that hashed plaintext will not consistently result in the same digest. The salt is<span>  </span>random<span> data that is used </span> to <span> defend passwords against </span>dictionary attacks<span> or against its hashed equivalent.
For each password a new salt is generated randomly.</span>
8 0
3 years ago
Which of the following contradicts the proposition that the stock market is weakly efficient?A. Over 25% of mutual funds outperf
Arisa [49]

Answer:

The correct answer is letter "C": Every January, the stock market earns above-normal returns.

Explanation:

Inside the Efficient Market Hypothesis or EMH, we can find the term "weak from efficiency" that states past price action do not influence the current stock price or it is not useful in order to predict future price movements. According to the same concept, the use of technical analysis or the suggestions of financial advisers is useless.

In that sense, option letter "C" indicates that <em>every January the stock market earns an above-normal return</em>, which clearly reflects that there is a repeated pattern in the stocks affecting their price during that specific month, something impossible to take place according to what "weak from efficiency" establishes.

5 0
3 years ago
How is the market segmented? at what segment should crescent be targeting?
raketka [301]
Markets are segmented as <span>behavioral, demographic, geographic, and psychographic. The crescent should be targeting the geographic segment

Hope this helps :))</span>
6 0
4 years ago
Other questions:
  • "Our teams in different countries have learned a great deal, and I am putting together an international team to study and share
    14·1 answer
  • (1 point)
    5·1 answer
  • The government of Sharonville is deep in debt, and consequently enacts a city ordinance that requires citizens to do volunteer w
    10·1 answer
  • Sarah's Machinery Company is deciding to dump its current technology A for a new technology B with smaller fixed costs but bigge
    12·1 answer
  • Philippe is from the Mediterranean coast of Greece and Sasha is from Iran. In their grocery store, this married couple is accust
    13·1 answer
  • If an entrepreneur can establish a strong and trustworthy management team, then the
    13·1 answer
  • Treasury spot interest rates are as follows: Maturity (years) 1 2 3 4 Spot rate (EAR) 1.4% 2.8% 3.6% 4.5% What is the price of a
    13·1 answer
  • Finerly Corporation sells cosmetics through a network of independent distributors. Finerly shipped cosmetics to its distributors
    5·1 answer
  • A proposal that has significant support among policymakers regardless of political party is the need to modernize the nation's i
    6·1 answer
  • Louisa is interested in investing in the stock of a corporation that pays regular dividends and generates consistent growth, so
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!