Question
A Chinese company EFG's sales per share is expected to be RMB100 next year. Its sales are expected to grow by 10% per year over
ABC is expected to have a profit margin of 10%, an ROE of 18%, and a cost of equity of 15% over the next five years. After five years, due to heightened competition, ABC is expected to have a profit margin of 8%, an ROE of 15%, and a cost of equity of 12%.
What is the intrinsic value of ABC's share?
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Finance for Executives Managing for Value Creation
Authors: Gabriel Hawawini, Claude Viallet
4th edition
9781133169949, 538751347, 978-0538751346
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