Determining the kind of valuation model

Assignment Help Electrical Engineering
Reference no: EM132523821

Case Information:

The current stock price (P0): $80 per share

The average growth rate of the dividend during the past ten years: 12% per year

The required return on the stock: 8% per year

The company's return on equity is 20% and they return 70% of the earnings while paying out the remainder as dividends.

The estimated earnings for the next year (E1) is $4 per share. The estimated earings per share for the following two years are: E2 = $4.2 and E3 = $4.6.

A) What kind of valuation model you can use to value Stock C? Do you need to make any assumption to value this stock based on the given information? Explain. (Hint: Use one of the four models you learned in the Bloomberg Equity Valuation cases of GE and Disney.)

Answer:

B) Estimate the intrinsic value of the stock and show your calculations.

Answer: Intrinsic value = $______________ per share

Reference no: EM132523821

Questions Cloud

Complete a cvp income statement for mountainbike : Compute the amount to be reported for inventory in the year-end variable costing balance sheet. Complete a CVP income statement for Mountainbike
Different types of capital budgeting techniques : Capital budgeting is the process that a business uses to determine which proposed fixed asset purchases it should accept, and which should be declined.
Describe the different types of budgets used : A budget is an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis.
Prepare the journal entries to record the admission of Amolo : Prepare journal entries to record the admission of Amolo to the partnership under each of the following assumptions: Amolo invested P500,000 for 30% interest
Determining the kind of valuation model : The estimated earnings for the next year (E1) is $4 per share. The estimated earings per share for the following two years are: E2 = $4.2 and E3 = $4.6.
What amount of revenue would nippon earn from tax services : Calculate the company's degree of operating leverage, assuming the desired net income of $1,800,000 and expected contribution margin are achieved.
Brief overview of how you perceive yourself professionally : Explain who you are and your chosen professional field as well as a brief overview of how you perceive yourself professionally
Market price must be forecasting a growth rate : The market value of ABC's stock is $42.00. The cost of capital is 10.5%. If current year dividend is $4, the market price must be forecasting a growth rate of?
Solve for pv of the note : Suppose someone offers to sell you a commercial note that calls for a single $3750 payment, five years from today.

Reviews

Write a Review

Electrical Engineering Questions & Answers

  What information is provided in each of the three bytes

1. A signal with a range of 0-12 V is sampled with an 8-bit ADC. What is the change in voltage (delta) between digitized levels 2. Using the SPI, we send three bytes to the LTC2600 DAC. What information is provided in each of the three bytes

  How long vehicle will operate before battery is fully empty

A 1000 kg battery powered adiabatic electric vehicle has a fully charged battery containing 20.0 MJ of stored energy. If it requires 12.0 kW of power to keep it moving at a constant velocity on a horizontal road

  What is a quantum wire

c. Name and briefly explain three fabrication methods for quantum wires. d. Name three potential applications for quantum wires.

  Determine efficiency and power dissipated in them amplifier

Under high-signal test conditions, a certain audio amplifier supplies a 24 V rms 1-kHz sinusoidal voltage to an 8- Ω load. The power supply delivers 4 A at a voltage of 50 V to the amplifier. The signal power supplied by the input source is neglig..

  Why voltage follower implemented with op-amp is useful ckt

Explain why a voltage follower implemented with an op-amp is a useful circuit component. Explain how the nature of KCL allows the connection to a single op-amp input of multiple voltage signals, each through a resistor, to perform a summing functi..

  What is data rate of digital electrical communication system

What is the data rate of a digital electrical communication system that uses 16 voltage levels to carry multiple bits with one voltage level, where each voltage level is kept at that level for a duration of 2 ms

  Find frequency that will cause inductor to have impedance

1. Determine the capacitance for a capacitorif its impedance is 5000 ohms at 400 radians/second. 2.Calculate the frequency that will cause a100mH inductor to have an impedance of 15,708 ohms.

  Compute the rms voltage across the load

A full-wave, ac/dc converter is connected to a resistive load of 5Ω. The voltage of the ac source is 120V (rms). If the triggering angle of the converter is 90°, compute the rms voltage across the load and the power consumed by the load.

  What would be needed to add to be able to make the circuit

Suppose you need an 8-bit counter, and an 8-bit shift register. How would you go about creating these. Could you create them using the counter and shift register you created already.

  Determine the type of armature winding for both machines

Coils are available which are rated at 4 volts and 5 amps. For the same number of coils to be used for both machines determine the type of armature winding for both machines, number of coils for both machines and kW rating of both.

  How to implement the cache protocol to support a state

Many multiprocessors distinguish between a cache block that is really shared and one that exists in the clean state in exactly one cache. The addition of a "clean and private" state eliminates the need to generate a bus transaction on a write to s..

  Why would i use a voltage multiplier instead of transformer

A dc power supply is supposed to have an output of 5 V. You measure exactly 5 V out of this supply using a dc voltmeter. Is it possible for the power supply to still have a problem? If so, how would you troubleshoot it?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd