High Tech Chip Company Is Expected to Have EPS in the Coming

question 98

Multiple Choice

High Tech Chip Company is expected to have EPS in the coming year of $2.50.The expected ROE is 14%.An appropriate required return on the stock is 11%.If the firm has a dividend payout ratio of 40%,the intrinsic value of the stock should be

• A) $22.73
• B) $27.50
• C) $28.57
• D) $38.46
• E) none of these

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Definitions:

Social Environment

The immediate physical and social setting in which people live or in which something happens or develops, including the culture that the individual is educated or lives in.

Cohort Birth Groups

Populations of individuals born around the same time, who experience similar historical and social conditions, influencing their beliefs, behaviors, and how they are viewed by society.

Marital Satisfaction

A measure of the degree of contentment, happiness, and fulfillment that an individual experiences in their marriage.

Ego Identity

A sense of self that develops through social interaction and is a key component of personality according to Erikson.