Question
Given the following data for a hypothetical corporation & its stock. 2020 ACTUAL 2021 FORECAST SALES $375 million DECLINE OF 2% FROM 2020 NET PROFIT
Given the following data for a hypothetical corporation & its stock.
|
| 2020 ACTUAL | 2021 FORECAST |
| SALES | $375 million | DECLINE OF 2% FROM 2020 |
| NET PROFIT MARGIN | 5.5% | 5.4% |
| NUMBER SHARES O/S (MILLIONS) | 15.3 | 15.5 |
| P/E RATIO | 25.0 x | 25.0 x |
Rate of return stockholders require is 11.5%
Determine this stocks intrinsic value (P0). Show all formulas & calculations.
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
0135811600, 978-0135811603
