Estimate the future EPS growth rate for each company.
CS Professional · Capital Commodity and Money Market · PYQS · December 2015
Estimate the future EPS growth rate for each company.
Answer & Explanation:
Growth Rates in EPS Particulars A Ltd. B Ltd. Dividend Payment (D/P) Ratio 0.4 0.6 Retention ratio (1-D/P ratio) 0.6 0.4 Growth rate (ROE x Retention ratio) 0.105 or 10.5% 0.0495 or 4.95%
Topics: Mergers and Acquisitions
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