Jumbo Transport, an Air-Cargo Company, Expects to Have Earnings Per

question 48

Multiple Choice

Jumbo Transport, an air-cargo company, expects to have earnings per share of $2.00 in the coming year. It decides to retain 10% of these earnings in order to lease new aircraft. The return on this investment will be 25%. If its equity cost of capital is 11%, what is the expected share price of Jumbo Transport?

• A) $12.71
• B) $14.83
• C) $16.94
• D) $21.18

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Definitions:

Forecasting HR Demand

The process of estimating the future human resource needs of an organization based on its business operations, strategic goals, and external market trends.

International Setting

The global context in which businesses operate, encompassing different cultures, laws, and economic environments.

Conflict Resolution Skills

The abilities required to effectively resolve disagreements or disputes in a constructive manner.

Successful

The achievement of desired visions and planned goals through effective performance or the attainment of anticipated outcomes.