$ 2.9 (b) How large is its dividend? Instructions: Enter your response rounded to two decimal places. $ 1.16 (c) What is the implied rate of return? Instructions: Enter your response as a percent rounded to the nearest two decimals. 4%

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter1: Introduction And Goals Of The Firm
Section: Chapter Questions
Problem 1.5CE
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If a $29 per share stock has a P/E ratio of 12 and pays out 40 percent of its profits in dividends,
(a) How much profit is it earning per share?
Instructions: Enter your response rounded to two decimal places.
$
2.9
(b) How large is its dividend?
Instructions: Enter your response rounded to two decimal places.
$
1.16
(c) What is the implied rate of return?
Instructions: Enter your response as a percent rounded to the nearest two decimals.
4 %
Transcribed Image Text:If a $29 per share stock has a P/E ratio of 12 and pays out 40 percent of its profits in dividends, (a) How much profit is it earning per share? Instructions: Enter your response rounded to two decimal places. $ 2.9 (b) How large is its dividend? Instructions: Enter your response rounded to two decimal places. $ 1.16 (c) What is the implied rate of return? Instructions: Enter your response as a percent rounded to the nearest two decimals. 4 %
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