Find stable growth firm

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Reference no: EM133068330

For the following stable growth firm, calculate:

  1. Cost of equity using CAPM, having risk free rate to be 2%, market risk premium 8%, and equity beta 1.4
  2. Current growth rate with the required rate of return on equity of 12% and retention ratio of 70%.
  3. Estimate the current share price having current year EPS to be $1.6
  4. Discuss for which firms EBITDA can be used, instead of FCF, for investment analysis and valuations and why?
  5. Explain how EBITDA multiple can be calculated for a private company valuation.

Reference no: EM133068330

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