Question
It is expected that the EPS of Sunshine Inc. in the next six years will be $3.2, $4.0, $4.9, $5.8, $6.7, and $7.2. The company
It is expected that the EPS of Sunshine Inc. in the next six years will be $3.2, $4.0, $4.9, $5.8, $6.7, and $7.2. The company maintains a dividend payout ratio of 65%. The average trailing industry P/E in year 5 is expected to be 16. The cost of equity is 11%. What is the current value of Sunshine’s stock?
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DPS can be calculated as EPS Dividend Payout Ratio PVDPS can be calculated as DPS 1Cost of Equityn Y...
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Equity Asset Valuation
Authors: Jerald E. Pinto, Elaine Henry, Thomas R. Robinson, John D. Stowe, Abby Cohen
2nd Edition
470571439, 470571438, 9781118364123 , 978-0470571439
