Company A has a P/E ratio of 7, and Company B provides for equity IPOs in the number of 2,000 and net income (at the end of reporting period) in the amount of 2,000,000 USD. Companies A and B are comparable in terms of their incomes (earnings).?

Company B locks in (the additional shares are not issued) the current number of its equity shares. If the net income of Company B grows continuously at annual rate of 3% and assuming annual (constant) market discount rate of 8%,?What is Company B's estimated stock price? 

Answer rating: 100% (QA)

To estimate the stock price of Company B you can use the Gordon Growth Model ... View the full answer