Brian Neil, CFA, estimates the intrinsic value of the equity shares of the Bruce Group of companies. He collects the following information (as of December 31, 2011):

Total assets (book value)	$120,000
Total liabilities (book value)	55,000
Required rate of return	9.00%
Average P/E, past five years	12.00
EPS, 2011	$5.00
Dividends, 2011	2.98
Expected dividends, 2016	3.80

The book value of the liabilities accurately reflects the market value. However, the market value of the assets is estimated at 105% of the reported value. Neil estimates the intrinsic value using three valuation methods: asset-based, price multiplier, and the Gordon growth model. The company has 1,000 outstanding shares.

Based solely on the information given,  at what price the security would be traded that the shares are least likely to be considered as fairly valued?

Answer rating: 100% (QA)

Certainly lets go through the calculations 1 AssetBased Valuation textAssetBased Value 105120... View the full answer