Unformatted text preview: (PE = MKP/EPS) If you expect the current earnings per share of $1.00 to grow at a rate of 10% for five years and in 5 years trade at a price earnings ratio of 15 times earnings. It would pay the same $1.50 dividend per share at the end of each year for five years. If you required the same 8% return would you buy the stock?...
View Full Document
- Spring '11
- Time Value Of Money, Dividend, Financial Ratio, Dividend yield, P/E ratio, price earnings ratio