Question
10. A company's book value of equity is 200 million euro. This company has 100 million shares outstanding and shareholders require a return of 12%.
10. A company's book value of equity is 200 million euro. This company has 100 million shares outstanding and shareholders require a return of 12%. This company operates in a mature industry and, even if a few years back the company's return on equity (ROE) was 15%, competition has reduced this company's ROE to 12%. Determine the price per share.
b) 2
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To determine the price per share we can use the pricetobook ratio PB ratio approach The PB ratio is ...
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Step: 2
Step: 3
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Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
8th Edition
1285190904, 978-1305176348, 1305176340, 978-1285190907
