Suppose GoldSmith Co considers a new investment project. The rate of return is expected 20% for this project. The plow b
Posted: Fri Jul 01, 2022 8:21 am
Suppose GoldSmith Co considers a new investment project. The rate of return is expected 20% for this project. The plow back is 30% of all earnings into the firm EPS for this year is $2.00, and the cost of equity is 12%. a What is the sustainable growth rate? b. What is the stock price? C. Compute PVGO. d. Compute P/E ratio What is P/E ratio if there would be no retained earnings? What is the relationship between growth opportunities and P/E ratios? e f