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

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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.