Q. It is January 1, 2003. Industry X is expected to have earnings of $ 10 million for the year which are realized exactly one year from today. The payout ratio for the organization has historically been 40% also is not expected to change into the future. Earnings are expected to grow at 6% per year. The risk free rate is 6% also the return on the market portafolio is 6%. If Industry X is valued at $ 80 million,
a) Illustrate what is the return on equity of the organization? also,
b) Illustrate what is the beta of the organization?