Web cities reactors projects a rate of return of 20 on new


Question: Web cities Reactors projects a rate of return of 20% on new projects. Management plans to plow back 25% of all earning into the time. Earrings this will be $6 per share, and investors expect a 15% rate of return on stocks facing the same risks as web cities.

a What is the sustainable growth rate? (Enter your answer as a whole percent.) Sustainable growth rate _____ %

b. What is the stock price? (De not round intermediate calculations. Round your answer to 2 decimal places.) Stock price ____

c. What is the present value of growth opportunities (PVOO)? (Do not round intermediate calculations. Round your answer to 2 decimal places.) PVGO $ _____

d. What is the PIE ratio? (De not round Intermediate calculation. Round your answer to 2 places.) PIE ratio _____

e. What would the price and PIE ratio be if the fem paid out all earnings as dividend? (Round your answer to 2 decimal places.)

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Finance Basics: Web cities reactors projects a rate of return of 20 on new
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