As a financial analyst you are estimating intrinsic value of Nevada incs shares then you are using two approaches.

1. You know that the firm is expected to pay a dividend of $ 4 they share at the end of the year. The firm has a beta of 1. The risk free rate is 4%, and the market return is 9%. Nevada currently sells for $ 60,000 a share, and its dividend is expected to grow at some constant rate, forever. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of five years?
2. You also valued the stock using P/ E multiples of comparable firms. Price and EPS of comparable firms are given below. Assuming the market is in equilibrium and Nevada currently sells for $60.00 a share, what is Nevada incs current EPS?

Comparable firms

	ABC	DEX	XOM	YMT
Price	9	15	32	19
EPS	2	5	4	3

1. CEO thinks that P/ E multiple is most reliable ratio for valuation. Do you agree?
2. CEO wants to know how to find a comparable firm to Nevada inc. For the valuation process. Briefly explain to the CEO how are you find a comparable firm to Nevada INC.