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What is growth rate

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Question - ABC has a return on equity (RE) of 12%, forecast Earnings per Share (EPS) of $2 and forecast Dividends per share (DPS) of $1.50. An appropriate rate of shareholder return in the market is 10%.

(a) What is growth rate, price and price to earnings (Price/EPS) ratio?

(b) If re-investment ratio were 0.4 what would be the DPS, growth rate, price and price to earnings ratio?

(c) How do you explain the change?

Reference no: EM133079089

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