I need help with the steps to solve this problem please.

timer Asked: Feb 17th, 2015

Question description

In November 2014 the Yahoo Finance website provided the following information for the stock of Oracle: Training P/E: 17.2   Forward P/E: 12.43   Earnings Growth Rate: 5.51%   If you assume that the earnings growth rate represents the long-run earnings growth rate for the firm, what is the implied rate of return required by investors? Round answer to the nearest tenth of a percent?

a. 10.1%

b. 5.5%

c. 11.3%

d. 13.6%

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