Please help me with FRA questions

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I cannot solve these questions, please help me!
1. Baker Computer earned $6.00 per share last year, has a retention ratio of 55%, and ROE is 20%. Assuming their required rate of return is 15%, how much would an investor pay for Baker on the basis of the earnings multiplier model?
2. If the expected dividend payout ratio of a firm is expected to rise from 50% to 55%, the cost of equity is expected to increase from 10% to 11%, ad the firm’s growth rate remains at 5%, what will happen to the firm’s P/E ratio? (unchange, increase or decline)
I really appreciate your helps. Thanks.
 
2)
Since the expected dividend ratio is increasing by 10% [(55-50)/50] and the cost of equity is increasing by 10% [(11-10)/10] and there is no change in the firm’s growth rate; the P/E ratio should remain unchanged.
PS: These are the topics of Equity not FRA I guess….
 
1)
k = Cost of Capital = 15%
g = Sustainable Growth Rate = ROE x Retention Rate = 20% * 0.55 = 11%
EPS = $6
D0 = EPS x Dividend Payout Ratio = 6 * 0.45 = $2.7
D1 = Next year’s Dividend = D0*(1+g) = 2.7*(1+0.11) = $2.997
P0 = Current Year’s Price = D1/(k-g)
P0 = 2.997 / (0.15-0.11)
P0 = 2.997/0.04
P0 = $74.925
Based upon Dividend Discount Motel with Sustainable Growth.
 
Thanks for your helps.
I found these questions but I don’t really know exactly source. Maybe they related to Equity and Corporate Finance more than FRA :)
Can you explain me more about question 2?
Both divident payout ratio and cost of equite rise by percentage…
 
To find the justified P/E Ratio we use the formula
P/E = (D1/E) / (k-g)
D1 = Next years dividend
E = Earnings
k = cost of equity
g = sustainable growth
So if Dividend increase by 10% [(55-50)/50] and cost of equity also increases by 10% [(11-10)/10] then the P/E should remain unchanged because the numerator and the denominator would be increasing by same percentage.
 
And in 1st question I used ”k’ as cost of capital. It’s basically cost of equity. Capital also includes debt.
 
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