Question
calculate the intrinsic value of common stock for xyz at January 1,year 1 given the following: Book value $50 Predicted earnings per share years 1
calculate the intrinsic value of common stock for xyz at January 1,year 1 given the following:
Book value $50
Predicted earnings per share years 1 through 5 respectively
$10, $8, $12, $15, and $10
Cost of capital 10%
No residual income is expected for years 6 and after, no dividends are paid
would you buy this stock if it were trading at $80 per share?
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Financial Accounting
Authors: Kermit D. Larson, William W. Pyle
4th Edition
0256067813, 978-0256067811
