Assume of the following information for Design Flaw Engineering, inc. Beta coefficient =1.50. Risk free rate...
Assume of the following information for Design Flaw Engineering, inc. Beta coefficient =1.50. Risk free rate = 6%, expected rate of return on market = 14%, plowback ratio = 60%, expected ROE (based upon beginning equity) = 20%. Estimate Design Flaw's leading earning multiple (I.e., Its P-E ratio)
The answer is 6.67x. I want to see the steps (Including formulas and substitute values)
Homework Answers
Given,
Beta = 1.50
Risk free rate = 6%
Market return = 14%
Plowback ratio = 60%
ROE = 20%
Solution :-
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