Question
A company earned $6.20 per share during the year that just ended and earnings should grow 3.8% per year into the future. The company has
A company earned $6.20 per share during the year that just ended and earnings should grow 3.8% per year into the future. The company has a beta of 1.10. The risk-free rate is 2.90% and the risk premium is 6%. The company has an ROE of 13.5%. What is the stock worth?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To determine the stocks worth we can use the Gordon Growth Model also known as the Dividend Discount ...
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Step: 2
Step: 3
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Intermediate accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
7th edition
978-0077614041, 9780077446475, 77614046, 007744647X, 77647092, 978-0077647094
