Note: Valuation date is end of 2019. Dividends assumed paid at end of year. Case Highlights 1. George states that he expects the company to grow at a steady rate over the next 6 to 8 years 2. They paid higher dividends then they planned for starting with 2018. If the company goes public payout ratio could decrease 3. After six or eight years the growth will slow down Steps to follow while doing your analysis 1. Use the data given in the table in this file. Some data points in your book might confuse you especially years before 2014. The critical data points are color coded yellow. These are from the financial statements of Reeby Sports. 2. Your group should come up with wise estimates of ROE, cost of capital and payout ratio. These estimates are color coded green. These estimates should be consistent with the case highlights and the expectations of George. 3. Calculate the following for each year satrting from 2021 EPS ROE BVPS, start of the year DIV= EPS x payout ratio Retained Earnings EPS X (1-payout ratio) BVPS, end of the year = BVPS, start of the year + Retained Earnings sustainable growth rate after horizon=ROEX (1-payout ratio) 4. Calculate Price at Horizon value. For example if your horizon is year 2025 5. You can try doing the same analysis with different ROE, payout and cost of capital estimates Note: Valuation date is end of 2019. Dividends assumed paid at end of year. Case Highlights 1. George states that he expects the company to grow at a steady rate over the next 6 to 8 years 2. They paid higher dividends then they planned for starting with 2018. If the company goes public payout ratio could decrease 3. After six or eight years the growth will slow down Steps to follow while doing your analysis 1. Use the data given in the table in this file. Some data points in your book might confuse you especially years before 2014. The critical data points are color coded yellow. These are from the financial statements of Reeby Sports. 2. Your group should come up with wise estimates of ROE, cost of capital and payout ratio. These estimates are color coded green. These estimates should be consistent with the case highlights and the expectations of George. 3. Calculate the following for each year satrting from 2021 EPS ROE BVPS, start of the year DIV= EPS x payout ratio Retained Earnings EPS X (1-payout ratio) BVPS, end of the year = BVPS, start of the year + Retained Earnings sustainable growth rate after horizon=ROEX (1-payout ratio) 4. Calculate Price at Horizon value. For example if your horizon is year 2025 5. You can try doing the same analysis with different ROE, payout and cost of capital estimates