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Hello please help me to find the solution of the problem and please show me the calculations made 2. Myra Gordon, a security analyst with

Hello please help me to find the solution of the problem and please show me the calculations made

2. Myra Gordon, a security analyst with the Alexander Portfolio Management Company, must estimate the intrinsic value of Sharpe Bow Company's common stock. She compiled the financial information given below: (25 points)

Sharpe Bow Co. Industry Average Market

Sales $2000 Profit Margin 5.2% Market return Rm=10%

Net Income $190 Asset Turnover 1.52 Risk free rate Rf=3%

Dividends $85 Leverage 1.35

Total assets $1,270 Beta 1.00

Common Equity $755

Shares issued 100

Beta 1.25

  1. Determine Sharpe's sustainable growth given its current financial condition and assuming its profit margin and asset turnover equal industry average.
  2. Determine owners required rate of return given Sharpe's current risk and assuming its risk equals the industry average.
  3. What is Gordon's estimate of the value of Sharpe's common stock if she believes it will maintain its current condition for three years and begin to resemble the industry average as described in parts (a) and (b).

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