question archive a) Calculate the price of a firm with a plowback ratio of
a) Calculate the price of a firm with a plowback ratio of
Subject:FinancePrice: Bought3
a) Calculate the price of a firm with a plowback ratio of .60 if its ROE is 20%. Current earnings, E1, will be $5 per share, and k = 12.5%.
b. What if ROE is 10%, which is less than the market capitalization rate? Compare the firm’s price in this instance to that of a firm with the same ROE and E1, but a plowback ratio of b = 0.
