Question: Compare the calculation that you obtained in question 6 with what you would have obtained for the value of the stock using the 'method of

Compare the calculation that you obtained in question 6 with what you would have obtained for the value of the stock using the 'method of comparables' stock valuation approach.

The figures for question 6 are as follows; beta is 0.49, market risk premium is 5.25%, Risk free rate is 2.67%, discount rate is 5.24%, growth rate is -1.52, and stock price is $2.34.

Can you please show formulas of how to get the stock value using the method of comparables stock valuation aswell as the answer and how/why it is different to what i got, comparing the two values.

Thanks in advance :)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!