Differentiate between each of the following terms:
(6)
Earnings Yield,
Dividend Yield,
PE Ratio.
List four most important factors that would influence an
investment analyst in the rating
of PE
ratios.
(4)
The firm projects a ROE of 25%; it will maintain a plowback
ratio of 0.3. The firm is
expecting earning of
R5 per share and investors expect a return of 10% on the stock.
What is the expected price and P/E ratio of the firm?