Price Ratio Analysis (LO4, CFA8) The current price of Parador Industries stock is $67 per share. Current earnings per share is $3.40, the earnings growth rate is 6 percent, and Parador does not pay a dividend. The expected return on Parador stock is 13 percent. What one-year-ahead PE ratio is consistent with Parador’s expected return and earnings growth rate?.
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
Price Ratio Analysis (LO4, CFA8) The current price of Parador Industries stock is $67 per share. Current earnings per share is $3.40, the earnings growth rate is 6 percent, and Parador does not pay a dividend. The expected return on Parador stock is 13 percent. What one-year-ahead PE ratio is consistent with Parador’s expected return and earnings growth rate?.
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