Question
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2015. Also assume that the firms equity beta is 1.40, the risk-free rate is 2.25 percent, and the market risk premium is 6.5 percent. Dividends per share $ 2.76 Return on equity 10.50 % Book value per share $ 17.35 Earnings Cash Flow Sales 2015 value per share $ 5.60 $ 6.90 $ 25.95 Average price multiple 13.70 9.60 2.60 Forecasted growth rate 13.60 % 11.71 % 7.70 % Using the P/E, P/CF, and P/S ratios, estimate the 2016 share price for Beagle Beauties. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
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