A compay is expected to have earnings of $1.26 per share in one year, $1.75 per share in two years, $2.51 per share in three
A compay is expected to have earnings of $1.26 per share in one year, $1.75 per share in two years, $2.51 per share in three years, and $2.96 in four years. The dividend payout ratio is also expected to remain at 40% over the next four years. The lagging P/E ratio is expected to increase up to 25 in three years. If the required rate of return is 10%, what is a fair value for this stock today?
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Step: 1
To determine the fair value of the stock today we need to calculate the present value of the expecte...
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Authors: Colin Drury
8th edition
978-1408041802, 1408041804, 978-1408048566, 1408048566, 978-1408093887
