Question
The current risk-free rate is 2 percent and the market risk premium is 3 percent. You are trying to value ABC company and it has
The current risk-free rate is 2 percent and the market risk premium is 3 percent. You are trying to value ABC company and it has an equity beta of 0.7. The company earned $3.50 per share in the year that just ended. You expect the company's earnings to grow 2 percent per year. The company has an ROE of 12 percent.
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What is the value of the stock? Do not round intermediate calculations. Round your answer to the nearest cent.
$
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What is the present value of the growth opportunity? Do not round intermediate calculations. Round your answer to the nearest cent.
$
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Basic Business Statistics Concepts And Applications
Authors: Mark L. Berenson, David M. Levine, Timothy C. Krehbiel
12th Edition
9780132168380
