It is expected that the EPS of Sunshine Inc. in the next six years will be $3.2, $4.0, $4.9, $5.8, $6.7, and $7.2. The company maintains a dividend payout ratio of 65%. The average trailing industry P/E in year 5 is expected to be 16. The cost of equity is 11%. What is the current value of Sunshine’s stock?

Answer rating: 100% (QA)

DPS can be calculated as EPS Dividend Payout Ratio PVDPS can be calculated as DPS 1Cost of Equityn Y... View the full answer