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Estimate values for mccartney ltd using the valuation

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Reference no: EM132512939

Lennon plc is planning to take over a smaller private limited company, McCartney Ltd, and needs to value the company.

Lennon plc has gathered the following data:

Lennon Plc

Weighted Average Cost of Capital (WACC) 14%

Price/earnings (P/E) ratio 12

Shareholders' cost of equity 16%

McCartney Ltd

Current dividend payment £0.27

Past 5 years' dividend payments (earliest first) £0.15, £0.18, £0.20, £0.22, £0.23

Current earnings per share (EPS) £0.38

Number of ordinary shares in issue 4,000,000

Requirements:

Question 1: Given the information provided above, estimate values for McCartney Ltd using the following valuation methodologies.

Reference no: EM132512939

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