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XYZ Company's earnings are $9 per share and the capitalization rate is 18%, assuming that the no-growth value of the firm is $50.
1. XYZ Company's earnings are $9 per share and the capitalization rate is 18%, assuming thatthe no-growth value of the firm is $50. The actual price of the stock is $40, implying that thepresent value of growth opportunity is -$10. The P/E ratio is ___________.a. 6.67b. 3.99c. 5.56d. 4.442.The market capitalization rate for Admiral Motors Company is 8%. Its expected ROE is 10% and itsexpected EPS is $5.00.If the firm's plowback ratio is 60%, what will be its P/E ratio?3.A company expects to pay dividend of $7 next year that is expected to grow at 6%. It retains30% of earnings. The rate of return is 10%. Calculate the ROE and the amount that the company'sstock should sell.a. 22%, $195.25b. 16%, $165.98c. 19%, $175.67d. 20%, $175.00
Question:1. XYZ Company's earnings are $9 per share and the capitalization rate is 18%, assuming thatthe no-growth value of the firm is $50. The actual price of the stock is $40, implying that...