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PLEASE SHOW ALL CALCULATIONS AND FORMULAS USED IN EXCEL! THANK YOU 2. Myra Gordon, a security analyst with the Alexander Portfolio Management Company, must estimate
PLEASE SHOW ALL CALCULATIONS AND FORMULAS USED IN EXCEL! THANK YOU
2. Myra Gordon, a security analyst with the Alexander Portfolio Management Company, must estimate the intrinsic value of Sharpe Bow Company's common stock. She compiled the financial information given below: (25 points) Sharpe Bow Co. Industry Average Market Sales $2000 Profit Margin 5% Market return Rm=10% Net Income $180 Asset Turnover 1.50 Risk free rate Rf=4% Dividends $80 Leverage 1.30 Total assets $1,250 Beta 1.00 Common Equity $750 Shares issued 100 Beta 1.2 a. Determine Sharpe's sustainable growth given its current financial condition and assuming its profit margin and asset turnover equal industry average. b. Determine owners required rate of return given Sharpe's current risk and assuming its risk equals the industry average. c. What is Gordons estimate of the value of Sharpe's common stock if she believes it will maintain its current condition for three years and begin to resemble the industry average as described in parts (a) and (b)Step by Step Solution
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