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The shareholders of AA Limited expects a Return on Equity (ROE) of 12% and has decided to maintain its plowback/retention ratio of 0.5. AA Limited expects earnings per share (EPS) of R3.60 with the company's investors expecting a return of 16%. Calculate the intrinsic value and the P/E ratio of AA Limited.

The shareholders of AA Limited expects a Return on Equity (ROE) of 12% and has decided to maintain its plowback/retention ratio of 0.5. AA Limited expects earnings per share (EPS) of R3.60 with the company's investors expecting a return of 16%. Calculate the intrinsic value and the P/E ratio of AA Limited.

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
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Problem 64P: Albion Inc. provided the following information for its most recent year of operations. The tax rate...
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The shareholders of AA Limited expects a Return on Equity (ROE) of 12% and has decided to maintain its plowback/retention ratio of 0.5. AA Limited expects earnings per share (EPS) of R3.60 with the company's investors expecting a return of 16%. Calculate the intrinsic value and the P/E ratio of AA Limited.
Transcribed Image Text:The shareholders of AA Limited expects a Return on Equity (ROE) of 12% and has decided to maintain its plowback/retention ratio of 0.5. AA Limited expects earnings per share (EPS) of R3.60 with the company's investors expecting a return of 16%. Calculate the intrinsic value and the P/E ratio of AA Limited.
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