Infomat Ltd reported an EPS of $24 for the just concluded financial year and paid a dividend
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Question:
Infomat Ltd reported an EPS of $24 for the just concluded financial year and paid a dividend per share of $9.60. The company's return on equity (ROE) is 15% per annum.
The analysts believe that Infomat's current growth rate will last for another three years. However, the growth rate will drop to the industry average of 5% in year four and will remain at that level forever. The company's required rate of return is 12% per annum.
The intrinsic value of Infomat's stock is,
a.
$132.90
b.
$121.86
c.
None of theoptions.
d.
$112.54
e.
$160.02
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