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BioTech's new cancer treatment drug sales have increased rapidly since its introduction, resulting in current earnings per share of $3.50.Future earnings are expected to grow
BioTech's new cancer treatment drug sales have increased rapidly since its introduction, resulting in current earnings per share of $3.50.Future earnings are expected to grow by 30% per year over the next 4 years.The firm is planning to maintain a dividend payout ratio of 40%.Analysts believe that an earning's multiple of 20 should be applied to BioTech's earnings in year 4 to estimate its terminal value.If the required rate of return on stocks of firms in this industry is 16% per year, what should be BioTech's current stock price?
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