Determine the PE ratio of this financial accounting question Falcon Technologies pays out 45% of its earnings as dividends, withexpected year-end earnings of $4 per share. The return on retainedearnings is 16%, and the required return on stock is 13%. Determine theP/E ratio.

Step 1: Define Price-to-Earnings (P/E) RatioThe Price-to-Earnings (P/E) Ratio is a financial metric…

Answered: Falcon Technologies pays out 45% of its…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 2P

See similar textbooks

Similar questions

Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the dividends paid to common stockholders for last year were 2,600,000 and that the market price per share of common stock is 51.50. Required: 1. Compute the dividends per share. 2. Compute the dividend yield. (Note: Round to two decimal places.) 3. Compute the dividend payout ratio. (Note: Round to two decimal places.)
The Price / Book ratio for Company A at the beginning of the year was 3.25x. At the end of the year, the Price / Book ratio was 2.8x and the share price had increased by 25% between the years – the share price at the end of the year was INR 125. Assuming that the P/E ratio at the beginning of the year was 10x and it had decreased to 8x at the end of the year, please calculate the Return on Equity for the year.
Breakaway wealth had net earnings of $336,000 this past year. dividends were paid of $77,280 on the company's book equity of $2,800,000. if Safeway has 175,000 shares outstanding with a current market price of $21 per share, what is the required rate of return?
A company has recently declared a dividend of 12p per share. The share price is £3.72cum div and earnings for the most recent year were 60p per share.What is the Price earnings (P/E) ratio?
North Side Corp’s dividends for year 1, year 2, year 3, and expected share price for year 3 are: D1=$1.95, D2=$2.10, D3=$2.18, and P3=$95 respectively. What is the company’s current share price given the required return of 8 percent?
General Accounting
O'Brien Inc. has the following data: rRF = 5.00%; RPM = 6.00%; and b = 1.70. What is the firm's cost of equity from retained earnings based on the CAPM? 15.20% 15.05% 17.33% 13.68% 15.35%
Sankey Company has earnings per share of $3.25. The benchmark PE is 17.4 times. What stock price would you consider appropriate?
A company currently issues dividends at a rate of $1.25 per share. It has cost of equity of 6% and a dividend growth rate of 1.5%. With this data, calculate the current value of the company's stock price.
Red, Inc., Yellow Corp., and BlueCompany each will pay a dividend of $2.35 next year. The growth rate in dividendsfor all three companies is 5 percent. The required return for each company’s stockis 8 percent, 11 percent, and 14 percent, respectively. What is the stock price foreach company? What do you conclude about the relationship between the requiredreturn and the stock price?
Monsters inc recently paid its annual dividend of $2.47 and reported an ROE of 6%. The firm pays out 50% of earnings as dividends. Based on your analysis, you estimate that the stock has a required return of 7%. What is the intrinsic value of this stock?
TargetCo has earnings per share of $5.50, 4 million shares, and a price per share of $55. If companies in the same industry as TargetCo are trading at multiples of 15 times earnings, what would be one estimate of an appropriate premium for TargetCo? One estimate of an appropriate premium for TargetCo is %. (Enter as a percentage rounded to one decimal place.) O

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS

Falcon Technologies pays out 45% of its earnings as dividends, with expected year-end earnings of $4 per share. The return on retained earnings is 16%, and the required return on stock is 13%. Determine the P/E ratio.