Question
Answer this question from the perspective of an analyst at the end of year 2021. Consider the following information for a firm that has a
Answer this question from the perspective of an analyst at the end of year 2021. Consider the following information for a firm that has a cost of equity = 10%.
|
| 2021 actual | 2022 estimate | 2023 estimate |
| EPS | $3.00 | $3.45 | |
| DPS | $1.20 | $1.38 | |
| BPS | $24.00 |
- Estimate the Residual Earnings in 2022 and 2023.
- If residual earnings are expected to grow at 2% after 2022, what is the intrinsic value stock price of the firm?
- What is the growth rate of residual earnings after 2022 that is consistent with a stock price of $40?
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International Financial Management
Authors: Cheol S. Eun, Bruce G.Resnick
6th Edition
71316973, 978-0071316972, 78034655, 978-0078034657
