QUESTION 12 a) RAB plc has an expected return on equity (ROE) of 10% per...
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QUESTION 12 a) RAB plc has an expected return on equity (ROE) of 10% per year, expected earnings per share of 2, and expected dividends of 1.50 per share. Its required rate of return is 10% per year. 1) What are its expected growth rate, its price, and its P/E ratio? ) If the plowback (retention) ratio was 0.4, what would be the expected dividend per share, the growth rate, price, and the P/E ratio? ii) Discuss and explain your results in parts (1) and (ii). [3.3 marks]
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