Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company declared an EPS of $3 over its most recent period in sales of $50/share. Total assets per share is $25 and the total

A company declared an EPS of $3 over its most recent period in sales of $50/share. Total assets per share is $25 and the total debt ratio is 1/2. They paid a dividend per share of $0.8 for the most recent period. The estimated beta for the company's stock is 1.50. The expected return is 13% and the rate of return on the 10-year note is 3%. If the current stock price is $54.5, what is the intrinsic value?

Please include ROE calculation in your answer.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Meetings Expositions Events And Conventions An Introduction To The Industry

Authors: George Fenich

5th Edition

0134735900, 9780134735900

More Books

Students also viewed these Finance questions