Computing the price of the stock, Accounting Basics

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Computing the price of the stock

Problem:

Magic The Gathering Trading Company is expected to have EPS in the upcoming year of $6. The expected ROE is 14%. An appropriate required return on the stock is 12%.

Required:

Question: If the firm has a plowback ratio of 54%, what should be the price of the stock?

Note: Show all workings.

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Accounting Basics: Computing the price of the stock

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Accounting Basics: Computing the price of the stock

Reference No:- TGS0884289

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

Q : Why strategic planning important in strong and weak economy

Q : Why hair thins in the scalp with age

Q : Calculate the price of the 6-month treasury bill

Q : Find optimal number of orders and average inventory level

Q : Computing the price of the stock

Q : Bonds yield to maturity

Q : What do acid fast stain and endospore stain have in common

Q : Determine the expected value of perfect information

Q : Find out preferred stock

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Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: Computing the price of the stock

Reference No:- TGS0884289

Recent Questions Asked Accounting Basics

Q : Why strategic planning important in strong and weak economy

Q : Why hair thins in the scalp with age

Q : Calculate the price of the 6-month treasury bill

Q : Find optimal number of orders and average inventory level

Q : Computing the price of the stock

Q : Bonds yield to maturity

Q : What do acid fast stain and endospore stain have in common

Q : Determine the expected value of perfect information

Q : Find out preferred stock

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