Question: COMMON STOCK VALUATION Question #3 expected dividend per share one year from now (D) $ expected earnings per share (EPS) $ growth rate (G) price/earnings

COMMON STOCK VALUATION Question #3 expected dividend per share one year

COMMON STOCK VALUATION Question #3 expected dividend per share one year from now (D) $ expected earnings per share (EPS) $ growth rate (G) price/earnings ratio (P/E ratio) required rate of return for equity investor (k orr) 4 per share 6 per share 5% 7 times 15% - Estimate the price of the common stock using the following formulas: dividend valuation model Gordon-growth model (see formula below) - price-to-earnings ratio valuation model P =- D (1 + g) r-g

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