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Stocks valuation in financial management subject

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This question is related to Stocks valuation in Financial Management subject. We calculated share price of ABC company as 4.58$ with the help of Discounted Free Cashflow method. When used P/E ratio to compare its price with industrial average, its stock price values at 3.15$. ABC stock seems over priced in my opinion. Explain why the stock price estimate from the discounted FCF model differs from actual stock price of ABC stock?

Reference no: EM133070368

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