Question: Using a Graham-Buffet (GB) model, where dividends are expected to remain flat for eleven (11) years, the book value grows at rate g for n=11
Using a Graham-Buffet (GB) model, where dividends are expected to remain flat for eleven (11) years, the book value grows at rate g for n=11 years, and the stock is sold at the end of year eleven (11), what is the intrinsic value for Acme Inc.'s common stock given the following information from their most recent financial statements:
| Item | Value |
BV0 (per share) | 11.68 |
D0 (per share) | 1.83 |
g | 6.07 % |
PBLL | 2.86 |
Rcs | 12.97 % |
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