Tayco Corporation Has Just Paid Dividends of $3 Per Share

question 23

Multiple Choice

Tayco Corporation has just paid dividends of $3 per share. The earnings per share for the company was $4. If you believe that the appropriate discount rate is 15% and the long term growth rate in dividends is 6%, and earnings is 6%, then what is the firm's P/E ratio?

• A) 8.33
• B) 33.33
• C) 44.44
• D) 11.11
• E) None of the above

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