Assume that the assumptions of our model in class apply to Google Price per share 2582 69 P E ratio (E earnings per share estimated for next year) 19 Discount rate 12 1) Estimate the value (per share) of Google, attributed to its earnings from current assets and the value attributed to its PVGO 2) ...

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Assume that the assumptions of our model in class apply to Google. Price per share 2582.69 P/E

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Assume that the assumptions of our model in class apply to Google.

Price per share 2582.69

P/E ratio (E=earnings per share estimated for next year): 19

Discount rate: 12%

1) Estimate the value (per share) of Google, attributed to its earnings from current assets and the value attributed to its PVGO.
2) Google reinvests 30% of its earnings every year and pays out 70% of its earnings. What is the growth rate of Google's earnings as implied by its price?
3) What is the return on investment on Google's projects?
4) Google is considering paying more cash to its shareholders. Assuming that Google is going to change its policy and pay out 80% of its earnings, What should be the new price of Google? Is changing the policy a good idea? why?