Kakuzi Ltd. reported EPS of Shs. 4 in the last financial period. The earnings are expected to grow at the rate of 10% p.a. for 6 years. The price earnings ratio (PIE) of the company at the end of the 6th year period is 20. The required rate of return is 15%. Calculate the theoretical value of this share for an investor who intends to hold on to the shares for 6 years. The dividend payout ratio is 60%.

Kakuzi Ltd. reported EPS of Shs. 4 in the last financial period. The earnings are expected to grow at the rate of 10% p.a. for 6 years. The price earnings ratio (PIE) of the company at the end of the 6th year period is 20. The required rate of return is 15%. Calculate the theoretical value of this share for an investor who intends to hold on to the shares for 6 years. The dividend payout ratio is 60%.

Name: Kakuzi Ltd. reported EPS of Shs. 4 in the last financial period. The e
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Description: Kakuzi Ltd. reported EPS of Shs. 4 in the last financial period. The earnings are expected to grow at the rate of 10% p.a. for 6 years. The price earnings ratio (PIE) of the company at the end of the 6th year period is 20. The required rate of return

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 2P

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