An analyst develops the following pro forma at the end of 2009 for a firm that uses
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An analyst develops the following pro forma at the end of 2009 for a firm that uses a 9 percent hurdle rate for its operations (in millions);
a. Forecast the cum-dividend operating income growth rate for 2011.
b. Using the two-stage growth model 14.7, value the equity with a long-term growth rate of 4 percent.
c. What is the forward enterprise price/earnings ratio implied by thevaluation?
Transcribed Image Text:
2009A 2010E 2011E $ 782 868 $6,400 ,848 7,190 Operating income Net operating assets Net financial obligations Common equity 756 5,644
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a Free cash flow for 2010 OI NOA 782 6848 6400 334 Rein...View the full answer
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