Provide answer The market capitalization rate for Admiral MotorsCompany is 10%. Its expected ROE is 12% and itsexpected EPS is $6. The firm's plow-back ratio is 80%.a. Calculate the growth rate.b. What will be its P/E ratio? (Do not round intermediatecalculations.)

Step 1: The calculation of the growth and P/E ratio AB1Capitalization rate10%2ROE12%3Expected…

Answered: The market capitalization rate for…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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The market capitalization rate for Admiral Motors Company is 7%. Its expected ROE is 12% and its expected EPS is $6. The firm's plowback ratio is 50%. Required: a. Calculate the growth rate. (Input your answer as a nearest whole percent.) b. What will be its P/E ratio? (Do not round intermediate calculations.)
The market capitalization rate for Admiral Motors Company is 6%. Its expected ROE is 10% and its expected EPS is $5. The firm's plowback ratio is 50%. Required: a. Calculate the growth rate. (Input your answer as a nearest whole percent.) Growth rate % b. What will be its P/E ratio? (Do not round intermediate calculations.) P/E ratio
es The market capitalization rate for Admiral Motors Company is 8%. Its expected ROE is 10% and its expected EPS is $5. The firm's plowback ratio is 60%. Required: a. Calculate the growth rate. (Input your answer as a nearest whole percent.) Growth rate 6% b. What will be its P/E ratio? (Do not round intermediate calculations.) P/E ratio
The market capitalization rate for Admiral Motors Company is 12%. Its expected ROE is 9%. If the firm's plowback ratio is 50%, what will be its P/E ratio? Round your answer to one decimal place.
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Castle-in-Sand generates a rate of return of 20% on its investments and maintains a plowback ratio of 0.30. Its earnings this year will be $4 per share. Investors expect a 12% rate of return on the stock. Required: (a.) Find the price and P/E ratio of the firm. (b.) What happens to the P/E ratio if the plowback ratio is reduced to 0.20? Why? (c.) Show that if plowback equals zero, the earnings-price ratio, E/P, falls to the expected rate of return on the stock.
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The market capitalization rate for Admiral Motors Company is 10%. Its expected ROE is 12% and its expected EPS is $6. The firm's plow-back ratio is 80%. a. Calculate the growth rate. b. What will be its P/E ratio? (Do not round intermediate calculations.)