Google Professional-Cloud-Architect Q&A - in .pdf

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  • Exam Code: Professional-Cloud-Architect
  • Exam Name: Google Certified Professional - Cloud Architect (GCP)
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Section C (4 Mark)
United Healthcare, a health maintenance organization, is expected to have high earning growth for the next five years and 6% after that. The dividend payout ratio will be only 10% during the high growth phase, but will increase to 60% in steady state. The return on equity was 21% in the most recent time period and is expected to stay at that level for the next 5 years. The stock has a beta of 1.65 currently, but the beta is expected to drop to 1.10 in steady state. (The treasury bill rate is 7.25%.) Estimate the price/book value ratio for United Healthcare, given the inputs above.
A. 2.09
B. 2.54
C. 1.95
D. 1.57
Answer: D

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