What growth rate is required for Boeing

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Reference no: EM132211867

Question - Boeing Company (NYSE: BA) has a current stock price of $49.86. It also has a P/B of 3.57 and book value per share of $13.97. Assume that the single - stage growth model is appropriate for valuing the company. Boeing's beta is 0.80, the risk - free rate is 5.00 percent, and the equity risk premium is 5.50 percent.

A. If the growth rate is 6 percent and the ROE is 20 percent, what is the justified P/B for Boeing?

B. If the growth rate is 6 percent, what ROE is required to yield Boeing's current P/B?

C. If the ROE is 20 percent, what growth rate is required for Boeing to have its current P/B?

Reference no: EM132211867

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