MF Corporation has an ROE of 16% and a plowback ratio of 40%. The market capitalization rate is 13%.Required:a. If the coming year's earnings are expected to be $1.90 per share, at what price will the stock sell?Note: Do not round intermediate calculations. Round your answer to 2 decimal places.b. What price do you expect MF shares to sell for in three years?Note: Do not round intermediate calculations. Round your answer to 2 decimal places.a. Priceb. Price

(a) price= $17.27(B) price=$ 20.81Explanation:If you have any problem let me know here in comment…

Answered: MF Corporation has an ROE of 16% and a…

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

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Similar questions

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You are told by yourinvestment advisor that Laduma Co. is expected to earn R5 per share next year, R6 per share the following year and that thereafter earnings are expected to grow by 8 percent per year. The dividend payout ratio is 60 percent and the required rate of return on Laduma shares is 15 percent. If the current share price is R40, would you expect your adviser to make a buy, hold or sell recommendation? Iftransaction costs are R2,50 per share, would you follow his advice?
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MF Corporation has an ROE of 12% and a plowback ratio of 60%. The market capitalization rate is 10%. Required: a. If the coming year's earnings are expected to be $1.50 per share, at what price will the stock sell? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. What price do you expect MF shares to sell for in three years? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a. Price b. Price $ $ 43.00 X 26.40

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