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Use the following information to answer questions Assume the latest EPS was $2, going down by 5% each year for the following five years. Thereafter,
Use the following information to answer questions
Assume the latest EPS was $2, going down by 5% each year for the following five years. Thereafter, the growth rate is constant at the annual growth rate of GDP of 4%. The discount rate is 10%.
Q4. The PV of EPS of the year five is ..
Q5. The price as of the year five (P5) is $
Q6. The price as of today (P0) is $
Q3. Use the following information to answer question 4-6. Assume the latest EPS was $2, going down by 5% each year for the following five years. Thereafter, the growth rate is constant at the annual growth rate of GDP of 4%. The discount rate is 10%. Q4. The PV of EPS of the year five is Q5. The price as of the year five (P5) is $ Q6. The price as of today (PO) is $Step by Step Solution
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