What is estimated share price if firm operates

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Reference no: EM133305668

MRN Corp reports the following data (all figures in millions)

Net Income for Year $184.50

Book Value at the beginning of the year $1,931.10

Book Value at the end of the year $2,456.00

Dividends Paid Out $24.40

The beta for the stock is 1.20. The market has an expected return of 0.0804 and the risk tree rate is 0.04

Assume that the firm has a constant dividend payout ratio and a constant cost of capital.

The firm has 50.00 million shares outstanding.

What is the estimated share price if the firm operates for one year and then shuts down using residual income (clean surplus) theory?

Reference no: EM133305668

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