Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Return on Equity (ROE) of the listed company OSIRUS S.A. is 10%, whereas the dividend payout ratio announced for the year is 37%. Current

The Return on Equity (ROE) of the listed company OSIRUS S.A. is 10%, whereas the dividend payout ratio announced for the year is 37%. Current years earnings per share are 6 and the market risk premium is 4%. The current market price of OSIRUS S.A. stock is 22 per share. Given that the risk-free rate (T-Bond rate) is 5%, the company has a beta coefficient of 1 and dividends and stock earnings are expected to grow at the same rate, estimate: a. The expected growth rate and the P/E ratio. b. The intrinsic value of OSIRUS S.A. using the P/E ratio approach. c. Whether buying OSIRUS S.A. shares would be beneficial for potential investors. d. The Value/EBITDA of OSIRUS S.A. given that the: tax rate is 40%, cost of capital is 11%, Depreciation/EBITDA is 20%, Capital expenditures/EBITDA is 25%. e. The Price/Book ratio.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Market Liberalization In Chile 1973-1982

Authors: Alejandra Salces

1st Edition

1138565202, 978-1138565203

More Books

Students also viewed these Finance questions