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In Dec 2019, the Yahoo! Finance website provided the following information for the stock of Zoracle:                         &nbsp

In Dec 2019, the Yahoo! Finance website provided the following information for the stock of Zoracle:                                                                        
                        Trailing P/E:    12.70                                       
                        Forward P/E:   14.80                                       
                        Earnings growth rate: 2.10%                                      
If you assume that the earnings growth rate represents the long -run earnings growth rate for the firm, what is the implied rate of return required by investors? Round your answer to the nearest tenth of a percent.

A. 7.0%
B. 10.0%                                                         
C. 8.9%
D. 2.1%
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Answer #1

Answer: Option-(D): 2.1% Reason: it is given that the earnings growth rate represents the long-run earnings growth rate for t

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