Gordon constant growth model

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We are examining the stock of Booing Company. The consensus forecast by analysts is that the stock will generate earnings per share of $10 in the next year (EPS1=$10) and will pay $6 dividend per share next year (DPS1=$6). Booing maintains an ROE of 25%. The required rate of return on the stock is 20%. We use the Gordon constant growth model in which the constant growth rate is equal to the sustainable growth rate. According to the model, the the fair market value of Booing (per share) should be $ 35 50 30 70 60

Reference no: EM133275450

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