E14.12. A Simple Valuation with Short-Term and Long-Term Growth Rates: Cisco Systems (Easy) In late 2002, analysts were forecasting fiscal 2003 and 2004 eanings per share for Cisco Systems of $0.54 and $0.61, respectively. Cisco's shares traded at $15 at the time. Assuming the long-term growth rate will be at 4 percent, the average rate of growth for gross national product, value Cisco using the model in equation 14.7 in this chapter. Apply the formula to earnings rather than operating income and use a required retorn for equity of 9 percent. Real World Connection See Minicases M5.1, M6.1, and M14.2 on Cisco, and also Exercise 2.11.