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Encore International n the world of fashi instinct and marketing are to success. Jordan Ellis on, company, had both. During 2015, his international casual-wear fashion

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Encore International n the world of fashi instinct and marketing are to success. Jordan Ellis on, company, had both. During 2015, his international casual-wear fashion Encore, rocketed to $300 million in sales after 10 years in business. Hi dresses, line covered the young woman from head to toe with hats, sweaters, was an blouses, skirts. pants, socks, and shoes. In Manhattan, there shops Encore shop every five or six blocks, each featuring a different color. Some showed the entire line in and others featured it in canary Encore that no one had made it. The company's historical growth was so spectacular Encore could have predicted it. However, analysts that could not keep securities on industry up the pace. that is erce in the future. They and that the firm might encounter little or no growth in the estimated that stockholders also should expect no growth in future Contrary to the conservative securities analysts, Jordan Ellis believed that the company could maintain a constant annual growth rate in dividends per share of the future, possibly for the next years and based his estimates on an established long-term expansion plan into European and Latin American markets. Venturing into these markets was expected to cause the risk of the firm, as measured by the risk premium on its stock, to increa immediately from 8.8% to 10%. Currently, the ree rate is 6% In preparing the long-term financial plan, Encore's chief financial officer has signed a junior financial analyst, Marc Scott to evaluate the fi current stock rm's as- price. He has asked Marc to consider the conservative predictions of the analysts and the aggressive predictions of the company founder, Jordan Elli Marc has compiled the following 2015 financial data to aid his analysis Securities 2015 value Earnings per share (EPS) Price per share of common stock Book value of common stock equity $60,000,000 Total common shares outstanding 2,500,000 Common stock dividend per sha TO DO a. What is the firm's current book value per share? b. What is the firm's current P/E ratio? c. 1) What is the current required return for Encore stock? (2) What will be the new required return for Encore stock assuming that the firm expands into European and Latin American markets as planned? correct and there is no growth in future dividends, d. If the securities analysts are what will be the value per share of the Encore stock? (Note: Use the new required return on the company's stock here.)

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