Question: gregory valued a public firm using a DCF model with a perpetuity terminal value (TV). gregorys model-estimated share price is 10x higher than the marke
gregory valued a public firm using a DCF model with a perpetuity terminal value (TV). gregorys model-estimated share price is 10x higher than the marke share price. How can greg make his model-estimated share price closer to the market-traded share price? greg can:
Select one:
a.
Lower the required return or WACC.
b.
Lower the beta of equity.
c.
Lower the growth rate of the perpetuity terminal value.
d.
Lower the market risk premium.
e.
Lower the risk free rate.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
