Question
Assume that EA is trading for $116and the company has the following financial results: EPS =$3.73. Growth is projected to be 12%. The required rate
Assume that EA is trading for $116and the company has the following financial results:
EPS =$3.73. Growth is projected to be 12%. The required rate of return for investors of this type of company is 18%. Using EPS,and not Dividends in the Dividend Discount Model,would you buy this stock?
1)No.The value of the stock is $69.62 and it is trading at $116
2)Yes,the value is $69.62 and the company is trading at $116
3)Not enough information to answer
4)It depends upon the business cycle
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Financial Markets and Institutions
Authors: Jeff Madura
12th edition
9781337515535, 1337099740, 1337515531, 978-1337099745
