Giantin Growing AG (GG) is currently selling for $38.50, with TTM EPS, and dividends per share of $1.36 and $0.91, respectively. The company’s P/E is 28.3, P/B is 7.1, and P/S is 2.9. The ROE is 27.0 percent, and the profit margin on sales is 10.24 percent. The treasury bond rate is 4.9 percent, the equity risk premium is 5.5 percent, and GG’s beta is 1.2. What is GG’s required rate of return, based on the capital asset pricing model (CAPM)?
Giantin Growing AG (GG) is currently selling for $38.50, with TTM EPS, and dividends per share of $1.36 and $0.91, respectively. The company’s P/E is 28.3, P/B is 7.1, and P/S is 2.9. The ROE is 27.0 percent, and the profit margin on sales is 10.24 percent. The treasury bond rate is 4.9 percent, the equity risk premium is 5.5 percent, and GG’s beta is 1.2. What is GG’s required rate of return, based on the capital asset pricing model (CAPM)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Giantin Growing AG (GG) is currently selling for $38.50, with TTM EPS, and dividends per share of $1.36 and $0.91, respectively. The company’s P/E is 28.3, P/B is 7.1, and P/S is 2.9. The ROE is 27.0 percent, and the profit margin on sales is 10.24 percent. The treasury bond rate is 4.9 percent, the equity risk premium is 5.5 percent, and GG’s beta is 1.2. What is GG’s required
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education