Unibody eps to estimate the price of stock

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1. Juniper Corp. has 40 million shares outstanding and has projected earnings for this year of $30 million. Juniper plans to pay 50% of its earnings as a dividend, and spend a further 15% of its earnings on share repurchases. If Juniper's earnings are expected to grow at 5% per year and its equity cost of capital is 8%, what price should investors expect to pay for one share of Juniper's stock?

2. Unibody holdings has EPS of $1.75, EBITDA of $110 million, debt of $300 million, and no cash. Unibody has 55 million shares outstanding.

a) If the average industry P/E ratio is 9.1, use Unibody's EPS to estimate the price of its stock.

b) If the average industry EV/EBITDA multiple is 10.2, use Unibody's EBITDA to estimate the price of its stock.

Reference no: EM131429057

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