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Earnings and P/E ratio

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Stock in Rich Corporation is currently selling for $25.00 per share. The firm's dividend yield is 10%.

A. If the firm distributes 40% of its earnings, what are its earnings?

B. What is the firms P/E ratio?

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Solution Summary

The solution explains how to calculate the earnings and the P/E ratio.

Solution Preview

A. The dividend yield is 10%
Dividend yield = Dividend Per share/Price
Dividend Per ...

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