Giantin Growing AG (GG) is currently selling for $38.50, with TTM EPS, and dividends per share of $1.36 and $0.91, respectively. The company’s P/E is 28.3, P/B is 7.1, and P/S is 2.9. The ROE is 27.0 percent, and the profit margin on sales is 10.24 percent. The treasury bond rate is 4.9 percent, the equity risk premium is 5.5 percent, and GG’s beta is 1.2. What is GG’s required rate of return, based on the capital asset pricing model (CAPM)?

Giantin Growing AG (GG) is currently selling for $38.50, with TTM EPS, and dividends per share of $1.36 and $0.91, respectively. The company’s P/E is 28.3, P/B is 7.1, and P/S is 2.9. The ROE is 27.0 percent, and the profit margin on sales is 10.24 percent. The treasury bond rate is 4.9 percent, the equity risk premium is 5.5 percent, and GG’s beta is 1.2. What is GG’s required rate of return, based on the capital asset pricing model (CAPM)?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 13P

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