compute residual income valuations using the Intel-related variables shared below. Perform your calculations using the spreadsheet. Assume
Question:
compute residual income valuations using the Intel-related variables shared below. Perform your calculations using the spreadsheet. Assume the following information for Intel:
Forecasted earnings per share for 2023 = $0.53 Forecasted earnings per share for 2024 = $1.87 Five-year forecasted earnings growth rate = 3.16% Intel's cost of equity = 9.45% (I've already set this parameter) Intel's book value per share at the start of 2022 = $24.52 Intel's dividend payout ratio = 30%
1. Compute Intel's residual income valuation using the three methods in the attached spreadsheet.
2. Compare the residual income values to Intel's current market price. Is the current price higher or lower than the current book value (shareholders' equity) per share? Is this relation expected based on the valuation spreadsheets?
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw