Price earnings multiple valuation method

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Reference no: EM131518029

1. What will be the proceeds and net profits to an investor who purchases the September 2016 expiration MTN calls for exercise price R85, if the stock price at option expiration is R75? What is the stock price at expiration is R95?(The call options sells at R6)

2. Suppose a stock analyst expect dividend payout of 30%, a cost of capital of 15%, and an expected growth rate of dividend of 5%, estimate the Price Earnings Ratio.

3. Discuss the shortcomings of using the Price Earnings multiple valuation method.

Reference no: EM131518029

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