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Verga plc has 10,000,000 shares and £16,000,000 current earnings, from which it distributes 50% as dividends. It has £16,000,000 book value of assets and cost of capital 8%. It is expected to grow at 24% per year for the next 6 years and thereafter, at 3% for ever. Find the share price, market-to-book value, dividend yield, P/E ratio and total returns.

Verga plc has 10,000,000 shares and £16,000,000 current earnings, from which it distributes 50% as dividends. It has £16,000,000 book value of assets and cost of capital 8%. It is expected to grow at 24% per year for the next 6 years and thereafter, at 3% for ever. Find the share price, market-to-book value, dividend yield, P/E ratio and total returns.

Intermediate Financial Management (MindTap Course List)
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 1P: Thress Industries just paid a dividend of 1.50 a share (i.e., D0 = 1.50). The dividend is expected...
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(c) Verga plc has 10,000,000 shares and £16,000,000 current earnings, from which it distributes 50% as dividends. It has £16,000,000 book value of assets and cost of capital 8%. It is expected to grow at 24% per year for the next 6 years and thereafter, at 3% for ever. Find the share price, market-to-book value, dividend yield, P/E ratio and total returns.
Transcribed Image Text:(c) Verga plc has 10,000,000 shares and £16,000,000 current earnings, from which it distributes 50% as dividends. It has £16,000,000 book value of assets and cost of capital 8%. It is expected to grow at 24% per year for the next 6 years and thereafter, at 3% for ever. Find the share price, market-to-book value, dividend yield, P/E ratio and total returns.
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