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You are valuing the stock of Apex Autos, Inc (NYSE: AA). You gathered the following data. - Current stock price: $40.00; - TTM EPS and
You are valuing the stock of Apex Autos, Inc (NYSE: AA). You gathered the following data. - Current stock price: $40.00; - TTM EPS and dividend per share: $2.00 and $1.00, respectively; - P/E,P/B, and P/S:10.0,2.5, and 1.8, respectively; - ROE and net profit margin: 20 percent and 18 percent, respectively; - Treasury bond rate, equity risk premium, and AA's beta: 2.3 percent, 5.5 percent, and 1.4, respectively. - The dividend and earnings growth rates are 6 percent. 6. Calculate the justified trailing P/E. 7. Calculate the justified forward P/E. 8. Calculate the justified trailing P/B. 9. Calculate the justified trailing P/S. 10. Assuming that the data you gathered and the constant growth model are appropriate, (a) state whether AA, based on fundamentals, appears to be fairly valued, overvalued, or undervalued. (b) Why? Justify your answer. You are valuing the stock of Apex Autos, Inc (NYSE: AA). You gathered the following data. - Current stock price: $40.00; - TTM EPS and dividend per share: $2.00 and $1.00, respectively; - P/E,P/B, and P/S:10.0,2.5, and 1.8, respectively; - ROE and net profit margin: 20 percent and 18 percent, respectively; - Treasury bond rate, equity risk premium, and AA's beta: 2.3 percent, 5.5 percent, and 1.4, respectively. - The dividend and earnings growth rates are 6 percent. 6. Calculate the justified trailing P/E. 7. Calculate the justified forward P/E. 8. Calculate the justified trailing P/B. 9. Calculate the justified trailing P/S. 10. Assuming that the data you gathered and the constant growth model are appropriate, (a) state whether AA, based on fundamentals, appears to be fairly valued, overvalued, or undervalued. (b) Why? Justify your
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