You are trying to value New Oriental Education Inc. using multiples. A regression of PE ratios...

 

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You are trying to value New Oriental Education Inc. using multiples. A regression of PE ratios against fundamentals for companies in the sector yields the following: PE=2.00+2.5 (Expected Growth rate: next 5 years)-5.0 (Beta) [R2=50%] New Oriental Education Inc. reported earnings per share of $0.60 in the most recent year and the current stock price is $12 a share. The beta for the stock is 1.20. If the market price is right and the sector regression holds, which will be expected growth in earnings per share for New Oriental Education over the next 5 years? L ii. 9.6% 4.8% iii. 12.5% iv. 9.4% O a. i. O b. ii. O c. iii. O d. iv. You are trying to value New Oriental Education Inc. using multiples. A regression of PE ratios against fundamentals for companies in the sector yields the following: PE=2.00+2.5 (Expected Growth rate: next 5 years)-5.0 (Beta) [R2=50%] New Oriental Education Inc. reported earnings per share of $0.60 in the most recent year and the current stock price is $12 a share. The beta for the stock is 1.20. If the market price is right and the sector regression holds, which will be expected growth in earnings per share for New Oriental Education over the next 5 years? L ii. 9.6% 4.8% iii. 12.5% iv. 9.4% O a. i. O b. ii. O c. iii. O d. iv.