Question
Income Statement (Millions) 1967 1968 1969 1970 1971 Sales 3079 3455 3632 3618 3848 Net Income 314 372 356 334 357 Shares Out 46158 46285
Income Statement (Millions) | |||||
1967 | 1968 | 1969 | 1970 | 1971 | |
Sales | 3079 | 3455 | 3632 | 3618 | 3848 |
Net Income | 314 | 372 | 356 | 334 | 357 |
Shares Out | 46158 | 46285 | 47076 | 47257 | 47281 |
Balance Sheet (Millions) | |||||
Total Asset | 3071 | 3289 | 3453 | 3740 | 3999 |
Total Debt | 125 | 162 | 186 | 216 | 307 |
Total Equity | 2682 | 2859 | 3040 | 3180 | 3402 |
Per Share | |||||
Book Value | 50.22 | 53.09 | 55.53 | 57.67 | 60.23 |
Market Value | 163.25 | 162.75 | 133.38 | 113.38 | 143.75 |
Key Financial Ratios | |||||
P/E Ratio | 24.2 | 20.4 | 17.5 | 16.5 | 19.6 |
Using the DDM method, Estimate Acme Corp growth rate to find the cost of equity. Outline your explanation and assumptions in determining the growth rate.
Steps to find Cost of Equity
Price of Share -
Estimate the Growth Rate (Outline your method in finding this) -
Last Dividend Paid -
Estimated Dividend Based on Growth Rate -
Cost of Equity = Estimated Dividend/Price of Share + Growth Rate
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