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. Price b. Price
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. Price b. Price
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
Related questions
Question
MF Corporation has an
Required:
-
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.
-
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.
![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. Price
b. Price](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fee357c8b-34af-454f-99c3-01937923673f%2F3302c826-17a4-42e5-8fdf-a76d4d37e92e%2F2ai32ne_processed.png&w=3840&q=75)
Transcribed Image Text: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. Price
b. Price
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