CFA Practice Question
A stock has an expected dividend payout ratio of 30%, required return of 12% and a growth rate of 8%. What is the P/E ratio?
A. 8.2x
B. 7.5x
C. 9.8x
Explanation: P/E = (D/E)/(r-g) = 0.3/(.12 -.08) = 7.5x.
User Contributed Comments 0
You need to log in first to add your comment.