Castles in the Sand generates a rate of return of 20% on its investments and maintains a plowback ratio of 0.30. Its earnings this year will be $5 per share. Investors expect a 15% rate of return on the stock. Find the price and P/E of the stock.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 3P
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Can you please give me true answer this general accounting question?

Castles in the Sand generates a rate of return of 20% on its
investments and maintains a plowback ratio of 0.30. Its earnings
this year will be $5 per share. Investors expect a 15% rate of
return on the stock.
Find the price and P/E of the stock.
Transcribed Image Text:Castles in the Sand generates a rate of return of 20% on its investments and maintains a plowback ratio of 0.30. Its earnings this year will be $5 per share. Investors expect a 15% rate of return on the stock. Find the price and P/E of the stock.
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