3. Flashcards
1
Q
A company claims that its growth rate will be 15% in the long run. The company has an ROE of 10% and pays out 50% of its earnings as dividends. Please estimate the perpetual growth rate.
A
5
2
Q
The two companies A and B are in the same industry. A has a higher PE ratio than B. What is the most likely reason?
A
A is growing at a stronger rate than B
