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1. What is the industry average price?earnings rat...

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1. What is the industry average price?earnings ratio? What is the price?earnings ratio for Ragan Inc.? Is this the relationship you would expect between the two ratios? Why? - I just cannot figure out the market value per share for Ragan Inc. 2. Carrington and Genevieve are unsure how to interpret the price?earnings ratio. After some head scratching, they've come up with the following expression for the price?earnings ratio:? ?? Beginning with the constant dividend growth model, verify this result. What does this expression imply about the relationship between the dividend payout ratio, the required return on the stock, and the company's ROE? - the formula they came up with is pictured in the attached file. 3. Assume the company's growth rate slows to the industry average in five years. What future return on equity does this imply, assuming a constant payout ratio? - not quite sure what they're asking me to do Attached is more information about the questions.

 

Paper#3905 | Written in 18-Jul-2015

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