Current selling price of kemper corporation

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Kemper corporation has ROE = 14%, Beta = 2 and plow back ratio 1/5 indefinetly. Current earning is $43 per share. Annual dividend was just paid. The analyst estimate of the coming year's market return is 10%, T-bill is offering 3% return now. Calculate

a. Current Selling price of Kemper Corporation

b. Current P/E ratio

c. Present Value of growth Opportunities

d. Suppose your research convices that Kemper will announce to reduce it plow back ratio to 1/8. Find the intrinsic value of stock

e. Explain why V0 is no longer equal to Po and why Vo is greater or less than Po

Reference no: EM132725568

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