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Business, 19.12.2019 06:31 Bukdom

National city corporation, a bank holding company, reported earnings per share of $2.40 in 1993, and paid dividends per share of $1.06. the earnings had grown 7.5% a year over the prior five years, and were expected to grow 6% a year in the long term (starting in 1994). the stock had a beta of 1.05 and traded for ten times earnings. the treasury bond rate was 7%. (a) estimate the p/e ratio for national city corporation. (b) what long term growth rate is implied in the firm's current p/e ratio?

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National city corporation, a bank holding company, reported earnings per share of $2.40 in 1993, and...
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