Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

As a health care analyst, you are valuing the stocks of Hasbro Inc. (NYSE: HAS) in March 2013. Based on an average of estimates obtained

As a health care analyst, you are valuing the stocks of Hasbro Inc. (NYSE: HAS) in March 2013. Based on an average of estimates obtained from capital asset pricing model (CAPM) and bond yield plus risk premium approaches, you estimate that HASs required rate of return is 9 percent. You have gathered the data from HASs 2012 annual report (amounts in millions of dollar). Although sales growth picked up in 2012, it has slowed considerably in recent years and you are concerned that trend will ultimately be reflected in profit margins. Given this consideration, you make the following long-term forecasts: Profit margin = 9.0 percent Dividend payout ratio = 35.0 percent Earnings growth rate = 7.0 percent Based on these data, what is HASs justified P/S?

1.700

18.725

0.985

4.815

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The 30 Minute Stock Trader

Authors: Laurens Bensdorp

1st Edition

1619615738, 978-1619615731

More Books

Students also viewed these Finance questions