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Consider the following table of Earnings Components: Reported EPS Analyst's EPS composition: Permanent component (Bp = 5) Transitory component (BT = 1) Value-irrelevant component

Consider the following table of Earnings Components: Reported EPS Analyst's EPS composition: Permanent

Consider the following table of Earnings Components: Reported EPS Analyst's EPS composition: Permanent component (Bp = 5) Transitory component (BT = 1) Value-irrelevant component (e = 0) The implied share price of Firm C's stock is: Firm A $ 12 80% 10% 10% Firm B $15 60% 35% 5% Firm C $ 18 75% 25% 0%

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