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Expected share price and P/E ratio of a firm

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Expected share price and P/E ratio of a firm

  • This topic has 4 replies, 2 voices, and was last updated 4 years ago by John Moffat.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • November 13, 2020 at 2:37 pm #594901
    pinkp@nther
    Member
    • Topics: 2
    • Replies: 2
    • ☆

    How would I go about calculating the below question? What is the answer so I can apply it to similar styles of question.

    A firm projects an ROE of 18%; it will maintain a pay out ratio of 40%. The firm is expecting earnings of R3 per share and investors expect a return of 15% on the investment.

    Calculate the expected share price and the P/E ratio of the firm.

    November 13, 2020 at 2:41 pm #594902
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    Calculating a share price is not in the syllabus for Paper FA.

    November 13, 2020 at 2:51 pm #594908
    pinkp@nther
    Member
    • Topics: 2
    • Replies: 2
    • ☆

    Which syllabus would I find it in? This will direct my search efforts. Thank you

    November 13, 2020 at 3:58 pm #594917
    pinkp@nther
    Member
    • Topics: 2
    • Replies: 2
    • ☆

    I don’t want to violate any forum rules by reposting the query in the incorrect forum. Kindly direct me to the correct one.

    November 13, 2020 at 5:20 pm #594924
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    Which ACCA exam are you studying for?

  • Author
    Posts
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