City plc plans to buy Utd plc. The current distributable earnings of Utd plc are 12m. City estimates that it will be able to grow future earnings of Utd by 4% per annum. It is proposing to use an earnings yield of 11% in the valuation of Utd. Using the Earnings Yield method, what value will City put on Utd?

Answer rating: 100% (QA)

We can use the Earnings Yield method to estimate the value City would place on Utd plc Heres ho... View the full answer