1. Estimate the common stock price for Cowboy Inc. using the Relative P/E model given the following information: Market P/E = 18, Relative P/E=0.95 , current P/E ratio = 10.4 , Average P/E = 12.7 , current EPS= $2.34 , EPS growth rate= 8.7% current price = $40.2 Do not round intermediate calculations.
2. Based on the constant growth model, an increase in which of the following will lower the current value of a stock? a)Amount of the next dividend. b)Dividend growth rate c)Opportunity cost