Question
P/E ratios and the dividend discount model Look up General Mills (GIS), Kellogg (K), Campbell Soup (CPB), and Seneca Foods (SENEA). a. What are the
P/E ratios and the dividend discount model
Look up General Mills (GIS), Kellogg (K), Campbell Soup (CPB), and Seneca Foods (SENEA).
a. What are the current P/E and P/B ratios for these food companies? What are the dividend and dividend yield for each company?
b. What are the growth rates of EPS and dividends for each company over the last five years? What EPS growth rates are forecasted by analysts? Do these growth rates appear to be on a steady trend that could be projected for the long run?
c. Would you be confident in applying the constant-growth DCF model to measure these companies' costs of equity? Why or why not?
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