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Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions:
- the investors required rate of return 14%
-the expected level of earning at the end of the year (E1) is $7
-the firm follows a policy of retaining 50% of it's earnings.
-the return on equity (ROE) is 15%, and -similar shares of stock sell at multiples of 7.693 times earning per share.
now show that you get the same answer using the discounted dividend model.
a. the stock price using the P/E ratio valuation method is $________ (round to the nearest cent.)
b. The stock price using the dividend discount model is $_________ (round to the nearest cent.)
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What is the minimum quantitative information you would need to calculate the net national loss from a tariff in a small price-taking country?
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Two sports apparel stores in Gainesville have the following: Store 1 has current assets of $800,000, current liabilities of $1 million and no inventory. Store 2 has current assets $1.2 million, current liabilities of $900,000 and an inventory worth $..
Assume that Casio Computer Company, LTD. sells handheld communication devices for $110 during August as a back-to-school special. The normal selling price is $160. The standard variable cost for each device is $60. Compute the revenue, sales price, s..
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