Essay
Silicon Valley Electronics (SVE)is expected to pay out 40% of its earnings and to earn an average return of 15% per year forever on its reinvested earnings.Stocks with similar characteristics are priced to return 12% to investors.By what percentage can SVE's earnings per share be expected to grow each year? What is the appropriate P/E ratio for the stock? What portion of SVE's total yield is likely to come from capital gains? What portion will come from dividend yield?
Correct Answer:
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g = b × r
g = 9%
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Correct Answer:
Verified
g = 9%
To calculate the P/E ra...
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
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