Carnival Corp. (CCL) provides cruises to major vacation destinations. Carnival operates 99 cruise ships in North America, Europe, Australia, and Asia. The company also operates hotels, sightseeing motor coaches and rail cars, and luxury day boats. These activities generated earnings per share of $2.26 for 2015. The stock price at the end of 2015 was $54.48. The previous stock prices and dividends are shown in the following table: Annual dividend Stock price at the ond of the year 2008 $ 1.20 $20.77 2009 $0.00 $27.06 2010 $0.40 $39.81 2011 $ 1.00 $28.97 2012 $ 1.00 $34.07 2013 $ 1.50 $38.29 Carnival is a firm in the General Entertainment industry, which is in the Services sector. The following table shows some key statistics for Carnival, the industry, and the sector: Key Statistic Carnival General Entertainment Services Sector P/E ratio 20.26 19.75 18.60 Dividend yield 2.67% 3.17% 1.57% Next 5-year growth 18.00% 17.65% 14.72% Use the various valuation models and relative value measures to assess whether Carnival stock is correctly valued. Compute value estimates from multiple models. The appropriate required rate of return is 11 percent. Carnival Corp. (CCL) provides cruises to major vacation destinations. Carnival operates 99 cruise ships in North America, Europe, Australia, and Asia. The company also operates hotels, sightseeing motor coaches and rail cars, and luxury day boats. These activities generated earnings per share of $2.26 for 2015. The stock price at the end of 2015 was $54.48. The previous stock prices and dividends are shown in the following table: Annual dividend Stock price at the ond of the year 2008 $ 1.20 $20.77 2009 $0.00 $27.06 2010 $0.40 $39.81 2011 $ 1.00 $28.97 2012 $ 1.00 $34.07 2013 $ 1.50 $38.29 Carnival is a firm in the General Entertainment industry, which is in the Services sector. The following table shows some key statistics for Carnival, the industry, and the sector: Key Statistic Carnival General Entertainment Services Sector P/E ratio 20.26 19.75 18.60 Dividend yield 2.67% 3.17% 1.57% Next 5-year growth 18.00% 17.65% 14.72% Use the various valuation models and relative value measures to assess whether Carnival stock is correctly valued. Compute value estimates from multiple models. The appropriate required rate of return is 11 percent
