In the problems following, use an equity risk premium of 5.5 percent if none is specified. 1.

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In the problems following, use an equity risk premium of 5.5 percent if none is specified.

1. If you were told that the average exercise price of the 50 million options in the previous problem was $6, estimate the value per share for ABV using the treasury stock approach.

2. You can compute the PE ratio using current earnings, trailing earnings, and for- ward earnings.

a. What is the difference between the ratios?

b. Which one is likely to yield the highest value and why?

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Human Resource Management

ISBN: 9780078029165

6th edition

Authors: John Bernardin

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Posted Date: Dec 15, 2020 02:05 PM

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In the problems following, use an equity risk premium of 5.5 percent if none is specified. 1.

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1 Estimated value per share Strike price 1 Premium 6 1 055 569 2 PE ratio is calculated as per bel... View the full answer

Human Resource Management

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