The equity of a firm trades at 2.6 times book value of $239.0 million at the end
Question:
The equity of a firm trades at 2.6 times book value of $239.0 million at the end of 2012 and your required return is 9 percent. The forward earnings forecast for 2013 is $33.46 million and the firm pays no dividends.
a. What is the growth rate for residual earnings after 2013 that is implied by the market price?
b. What is the forecast of earnings for 2014 that is implicit in the market price?
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The pro forma 2012 2013 EPS 3346 DPS 00 BPS 2390 27246 Residual earnings 9 1195 a Set up ...View the full answer
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Related Book For
Financial Statement Analysis and Security Valuation
ISBN: 978-0078025310
5th edition
Authors: Stephen Penman
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