medium · CFA Level I Equity Investments
A stock issued by Meridian Pack is expected to pay a dividend of 2.50 next year (D_1), paying out 40% of next year’s earnings. The required rate of return is 10% and the sustainable growth rate is 6%.
The justified forward P/E multiple is closest to:
- 10.0x
- 25.0x
- 15.0x
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