What is the present value of its growth opportunities

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Reference no: EM131896551

1. A company has expected earnings of $3 per share for next year. The firm's ROE is 20%, and its earnings retention ratio is 70%. If the firm's market capitalization rate is 15%.

1) What is the present value of its growth opportunities?

2) What is the stock’s P/E ratio?

2. A promissory note calling for payments of $1100 at the end of each year for the next fifteen years is offered for sale at $10,000. Find the rate of return.

Reference no: EM131896551

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