Compute the current earnings multiplier

Assignment Help Operation Management
Reference no: EM131989571

Currently, the dividend-payout ratio (D/E) for the aggregate market is 60 percent, the required return (k) is 11 percent, and the expected growth rate for dividends (g) is 5 percent.

a. Compute the current earnings multiplier.

b. You expect the D/E payout ratio to decline to 50 percent, but you assume there will be no other changes. What will be the P/E?

c. Starting with the initial conditions, you expect the dividend-payout ratio to be constant, the rate of inflation to increase by 3 percent, and the growth rate to increase by 2 percent. Compute the expected P/E.

d. Starting with the initial conditions, you expect the dividend-payout ratio to be constant, the rate of inflation to decline by 3 percent, and the growth rate to decline by 1 percent. Compute the expected P/E.

Reference no: EM131989571

Questions Cloud

How many units must rosenberg sell in the first year : How many units must Rosenberg sell in the first year to break even? Carefully explain, including any assumptions that you make.
Is the investment justified : A special effects process can be carried out by using a machine which can be acquired for Php450,000. The sources for these funds are as follows.
What are thoughts on tax implications of investor losses : What are your thoughts on the tax implications of investor losses? Has the Trump Tax Proposal included changes in the tax treatments of any of these areas?
What objectives do you still want to know more about : What objectives do you still want to know more about? What can be done differently next week to make the DQs more meaningful for you?
Compute the current earnings multiplier : Currently, the dividend-payout ratio (D/E) for the aggregate market is 60 percent, the required return (k) is 11 percent
Why do you think that most taxpayers do not pay taxes : Do you think that most taxpayers don't pay taxes like they should for their household employees? Why or why not? Class?
Mobile applications management system : COSC2531 Programming Fundamentals Assignment - PlayStore: Mobile Applications Management system. Write classes, add methods and variables to complete tasks
Primary mechanisms of corporate governance in chad : What are the primary mechanisms of corporate governance in Chad? Are they required by legal mandate or adopted at the discretion of the company?
What is the stated interest rate on the bonds : What is the stated interest rate on the bonds? What is the effective interest rate on the bonds? Why is there a difference between these two numbers?

Reviews

Write a Review

Operation Management Questions & Answers

  Book review - the goal

Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..

  Operational plan in hospitality enterprise

Operational plan pertaining to a hospitality enterprise is given in detail in the solution. The operational plan is an important plan or preparation which gives guidelines regarding the role and responsibilities of each and every operation at all lev..

  Managing operations and information

Recognise the importance of a strategic approach to the development and deployment of organisational information systems. Demonstrate an understanding of the importance of databases and their integration to the organisation's overall information mana..

  A make-or-buy analysis

An analysis of the holding costs, including the appropriate annual holding cost rate.

  Evolution and contributor of operations management

Briefly explain Evolution and contributor of Operations management.

  Functions and responsibilities of an operations manager

A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..

  Compute the optimal order quantity

Compute the Optimal Order quantity of DVD players. Determine the appropriate reorder point.

  Relationship to operations practice in the organisation

Evaluate problems in operations and identify approaches to overcoming them. Critically evaluate operating plans and identify areas for improvement. Justify, implement and evaluate changes to operations in line with modern approaches.

  A make or buy analysis

Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.

  Prepare a staffing plan

Prepare a staffing plan showing the change of your unit from medical/surgical staffing to oncology staffing.

  Leadership styles in different organizations

Ccompare the effectiveness of different leadership styles in different organizations

  Risk management tools and models

Be able to understand the concept of risk, roles and responsibilities for risk management and risk management tools and models.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd