CFA Practice Question

There are 201 practice questions for this study session.

CFA Practice Question

For FPL Group, Inc. (FPL), a utility analyst, forecasts a long-term payout rate of 50 percent, a long-term growth rate of 5 percent, and a required rate of return of 9 percent. Based upon these forecasts of fundamentals, what is FPL's justified leading P/E?
A. 13.125
B. 11.45
C. 12.5
Explanation: Leading justified P/E is: P/E = (1-0.5)/(0.09 - 0.05) = 12.5.

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