Question
HNV Inc. had FCFE of $2 on $4 of earningslast year. FCFE and earning are expected to grow at 20% over the next 2 years.
HNV Inc. had FCFE of $2 on $4 of earningslast year. FCFE and earning are expected to grow at 20% over the next 2 years. To calculate the two year price target, you use an expectedP/E ratio of 8. Using an appropriate discount rate of 10% and a 2-stage FCFE, what is the intrinsic value of its stock?
| $34.91 |
| $42.65 |
| $38.08 |
| $46.08 |
| $48.00 |
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International Financial Reporting A Practical Guide
Authors: Alan Melville
6th edition
1292200743, 1292200766, 9781292200767, 978-1292200743
