A Chinese company EFG's sales per share is expected to be

RMB100 next year. Its sales are expected to grow by 10% per year over the next

five years and will grow by 6% per year thereafter.

ABC is expected to have a profit margin of 10%, an ROE of 18%, and a cost of

equity of 15% over the next five years. After five years, due to heightened

competition, ABC is expected to have a profit margin of 8%, an ROE of 15%, and

a cost of equity of 12%.

What is the intrinsic value of ABC's share?

Answer rating: 100% (QA)

Solution 1 2 3 4 5 6 a sale grows by 10 for 5years thereafter 6 100 110 121 1331 14641 1551946 b p... View the full answer