ABC trades for $30, has current earnings of $4, current dividends of $2, and a beta of 1.2. The risk-free rate is 6% and the market risk premium is 5%. What is the ROE implied by the DDM? ROE = ___% (answer the closest integer, without % sign)
ABC trades for $30, has current earnings of $4, current dividends of $2, and a beta of 1.2. The risk-free rate is 6% and the market risk premium is 5%. What is the ROE implied by the DDM? ROE = ___% (answer the closest integer, without % sign)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Question
ABC trades for $30, has current earnings of $4, current dividends of $2, and a beta of 1.2. The risk-free rate is 6% and the market risk premium is 5%.
What is the ROE implied by the DDM?
ROE = ___% (answer the closest integer, without % sign)
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