Question
Facebook, Inc (FB)s current earnings per share (EPS 0 ) is $10, and the company has no free cash flow to pay dividends for the
Facebook, Inc (FB)s current earnings per share (EPS0) is $10, and the company has no free cash flow to pay dividends for the next five years. If you forecast average annual EPS growth rate of 20% for the next five years, a PE ratio of 20 by the end of year 5, a discount rate of 8%, what is the fair value per share of FB today? (Forward PE Approach for Stock Valuation)
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Raising Venture Capital
Authors: Rupert Pearce, Simon Barnes
1st Edition
0470027576, 978-0470027578
