Estimate the price and book ratio for a firm

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Reference no: EM131530903

Assume that you have been asked to estimate the Price / Book ratio for a firm which has the following characteristics:

High Growth Stable Growth

Length of Period 5 years forever after year 5

Return on Equity 30% 20%

Payout Ratio 20% 60%

Beta 1.25 1.00

The risk free rate is 6% and the risk premium used is 5.5%.

Reference no: EM131530903

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