Question
Assume that you have been asked to estimate the Price / Book ratio for a firm which has the following characteristics: High Growth Stable Growth
Assume that you have been asked to estimate the Price / Book ratio for a firm which has the following characteristics:
High Growth Stable Growth
Length of Period 5 years forever after year 5
Return on Equity 30% 20%
Payout Ratio 20% 60%
Beta 1.25 1.00
The risk free rate is 6% and the risk premium used is 5.5%.
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Financial Management Principles And Applications
Authors: Sheridan Titman, John Martin
14th Global Edition
1292349824, 978-1292349824
