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can you answrr 3 and 4 show your work. 3) (4 pts) You estimate Company C will have EPS of $2.00 one year from now

can you answrr 3 and 4
show your work. image text in transcribed
3) (4 pts) You estimate Company C will have EPS of $2.00 one year from now and EPS of $3.00 tw years from now. After year 2, you assume the company's earnings will grow at a constant rate of 6%. The dividend payout ratio is expected to remain constant at 40%. The appropriate discount rate for this company is 8.0%. Based on a constant growing perpetuity estimation, what is the expected selling price of Company C's stock in two years? What is the implied P/E multiple in two years based on your model? a. 1(Ito.o6) (ooa.o.aa) : 3.60 The stock will sell for $ This implies a P/E Multiple of 21.20-in two years in two years b. What is your estimate of the intrinsic value of the stock today? 5030 3.6a Intrinsic Value today 55.38 (5 pts) Assume Company E has $350 million in Debt and 70 million shares of common stock outstanding. The Company is expected to generate FCF of $60 million in year 1. The FCF in year 2 is expected to be $65 million. After year 2, the company's FCF is expected to grow at a constant rate of 4%. Assume the WACC&7,0%. 4) a. What is your estimate of the horizon value of the assets at the end of year 2? 2253.33 or of ' Market Value of the assets Horion Value)at the end of year 2 s2253.33vm b. What is your estimate of the Market Value of the assets today (year 0)? 5 CAC nottesm MV of Assets today-$ . What is your estimation of the price per share today? Price per share today s 11. 27251 3. 927.1 2473

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