Grott and Perrin,Inc

question 4

Multiple Choice

Grott and Perrin,Inc.has expected earnings of $3 per share for next year.The firm's ROE is 20%,and its earnings retention ratio is 70%.If the firm's cost of capital is 15%,what is the present value of its growth opportunities?

• A)$20
• B)$70
• C)$90
• D)$115

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Definitions:

Cash Functions

The various roles and activities associated with cash management in a business, including collection, disbursement, and investment.

Treasurer

An officer of a company or organization responsible for managing the institution's treasury, including financial planning, risk management, and investment.

Chief Operations Officer

A senior executive tasked with overseeing the day-to-day administrative and operational functions of a company.

Working Capital Management

The management of a company's short-term assets and liabilities to ensure its ongoing operational efficiency and financial stability.