Estimate a plausible price estimate for a share

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Reference no: EM132033480

Answer the following question

You are trying to establish a value for the equity of a small firm. Recently, the EPS of the firm was reported as $1.94.

You expect the earnings to grow at 25% per year for the next six years. After that, you expect earnings growth should level-off to a sustainable rate of 2.25% per year.

If 9% is a reasonable required return on the investment, estimate a plausible price estimate for a share

Reference no: EM132033480

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