The common stock of WHJ Corporation pays out 40% of its earnings and dividends, which are expected to be $3 at year-end. The return on retained earnings is 15%, and the required return on stock is 14%. Determine the P/E ratio.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
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Determine the PE ratio on these general accounting question

The common stock of WHJ Corporation pays out 40% of
its earnings and dividends, which are expected to be $3
at year-end. The return on retained earnings is 15%, and
the required return on stock is 14%.
Determine the P/E ratio.
Transcribed Image Text:The common stock of WHJ Corporation pays out 40% of its earnings and dividends, which are expected to be $3 at year-end. The return on retained earnings is 15%, and the required return on stock is 14%. Determine the P/E ratio.
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