The current price of a company is $40/share. The company is not expected to pay dividends. Furthermore,
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Question:
The current price of a company is $40/share. The company is not expected to pay dividends. Furthermore, analysts are forecasting EPS to go to $5.00 in four years. Similarly, the PE-multiple is estimated will be 18 in four years.
a) Find the expected return or IRR, the expected price return, the expected dividend return, using a required rate of 12 %, find the intrinsic value, and finally is the company undervalued?
Related Book For
Equity Asset Valuation
ISBN: 978-0470571439
2nd Edition
Authors: Jerald E. Pinto, Elaine Henry, Thomas R. Robinson, John D. Stowe, Abby Cohen
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