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An earnings growth rate of 6 % . The firm s financial characteristics were excpected to approach industry average after 2 0 2 8 The
An earnings growth rate of The firms financial characteristics were excpected to approach industry average after
The industry averages were as follows
Return of capital
DebtEquity ratio
Interest Rate on Debt
Suven Life Sciences Ltd Had a beta of in and the unlevered beta was not expected to change over time
a What is the expected growth rate in earnings, based upon fundamentals, for the high growth period to
b What is the expected payout ratio after
c What is the expected price beta after Note: The unlevered beta is the beta of a company without any debt
d What is the expected price at the end of
e Calculate yearly cash flows and estimate the value of the stock, using the twostage dividend discount model.
f How much of this value can be attributed to extraordinary growth and how much to the stable growth?
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