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Can you answer question 29, 30, and 31
valuation estimates for the firm. Assume the values provi that the firm's equity beta is 1.40, the risk-free rate is 2.75 percent, and the market risk premium is 7 percent. ded are from year-end 2015. Also as sume Dlvidends per share Return on equity Book value per share 2.04 9.50% $17.05 Earnings $5.00 13.10 13.48% Cash Flow Sales 2015 value per share Average price multiple Forecasted growth rate $6.60 9.42 11.41% $25.65 2.36 7.34% 27. Constant Perpetual Growth Model LO1, CFA6) What are the sustainable growth rate an required return for Beagle Beauties? Using these values, estimate the current share price of Beagle Beauties stock according to the constant dividend growth model. 28. Price Ratios (L04, CFA8) Using the P/E, P/CF, and P/S ratios, estimate the 2016 share price for Beagle Beauties. Residual Income Model (LO3, CFA9) return you calculated in Problem 27 are valid. Use the clean surplus relationship to calculate the share price for Beagle Beauties with the residual income model. 29. Assume the sustainable growth rate and required Use the information from Problem 29 and 30. Clean Surplus Dividend (L03, CFA9) calculate the stock price with the clean surplus dividend. Do you get the same stock pride as in Problem 29? Why or why not? Stock Valuation (LO1, LO3, L04) Beagle Beauties is overvalued or undervalued at its current price of around $82? At what price do you feel the stock should sell? Given your answers in Problems 27-30, do you feel 31. valuation estimates for the firm. Assume the values provi that the firm's equity beta is 1.40, the risk-free rate is 2.75 percent, and the market risk premium is 7 percent. ded are from year-end 2015. Also as sume Dlvidends per share Return on equity Book value per share 2.04 9.50% $17.05 Earnings $5.00 13.10 13.48% Cash Flow Sales 2015 value per share Average price multiple Forecasted growth rate $6.60 9.42 11.41% $25.65 2.36 7.34% 27. Constant Perpetual Growth Model LO1, CFA6) What are the sustainable growth rate an required return for Beagle Beauties? Using these values, estimate the current share price of Beagle Beauties stock according to the constant dividend growth model. 28. Price Ratios (L04, CFA8) Using the P/E, P/CF, and P/S ratios, estimate the 2016 share price for Beagle Beauties. Residual Income Model (LO3, CFA9) return you calculated in Problem 27 are valid. Use the clean surplus relationship to calculate the share price for Beagle Beauties with the residual income model. 29. Assume the sustainable growth rate and required Use the information from Problem 29 and 30. Clean Surplus Dividend (L03, CFA9) calculate the stock price with the clean surplus dividend. Do you get the same stock pride as in Problem 29? Why or why not? Stock Valuation (LO1, LO3, L04) Beagle Beauties is overvalued or undervalued at its current price of around $82? At what price do you feel the stock should sell? Given your answers in Problems 27-30, do you feel 31
