Required: a. MF Corporation has an ROE of 15% and a plowback ratio of 40%. If the coming year's earnings are expected to be $3 per share, at what price will the stock sell? The market capitalization rate is 12%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price $ 22.50 x
Required: a. MF Corporation has an ROE of 15% and a plowback ratio of 40%. If the coming year's earnings are expected to be $3 per share, at what price will the stock sell? The market capitalization rate is 12%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price $ 22.50 x
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 12P
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Vinay
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![Required:
a. MF Corporation has an ROE of 15% and a plowback ratio of 40%. If the coming year's earnings are expected to be $3 per share, at
what price will the stock sell? The market capitalization rate is 12%. (Do not round intermediate calculations. Round your answer to 2
decimal places.)
Price
$
Price
b. What price do you expect MF shares to sell for in three years? (Do not round intermediate calculations. Round your answer to 2
decimal places.)
22.50
$
26.80 x](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff9a63c53-5df5-4464-87ce-151da065c3ff%2F24775dec-9b1f-43a6-b349-59eaee291049%2F2441g50o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required:
a. MF Corporation has an ROE of 15% and a plowback ratio of 40%. If the coming year's earnings are expected to be $3 per share, at
what price will the stock sell? The market capitalization rate is 12%. (Do not round intermediate calculations. Round your answer to 2
decimal places.)
Price
$
Price
b. What price do you expect MF shares to sell for in three years? (Do not round intermediate calculations. Round your answer to 2
decimal places.)
22.50
$
26.80 x
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