Ch. 9 Flashcards by A C

Q

DIV/EPS =

A

1-k

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Q

EPS =

A

DIV / (1-k)

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Q

P₀=

A

(EPS₁/r) + NPVGO

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Q

INV₁ =

A

= EPS₁ * k

(k = plowback ratio)

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Q

NPV₁ =

(NPV of new investments)

A

[INV₁ (ROE - r)] / r

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Q

g =

A

k * ROE

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Q

ROE =

A

g/k

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Q

A

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