What is rando estimated discount rate for each growth rate

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Reference no: EM132764126

Rando's share price is €56.99. You wish to value the company's equity and compare your valuation to the share price. The dividend that has just been paid is €1.78 and the earnings per share is €7.96. The return on equity for the firm is 18.66 per cent.

There are a number of estimated growth rates for the firm and these are given below:

Source Growth Rate (%)
DPS growth (5 yr) 9.52
EPS growth (5 yr)1 6.85
EPS growth (1 yr) 16.01
DPS growth (1 yr) 17.98

Problem 1: What is Rando's estimated discount rate for each growth rate?

Problem 2: Which estimate makes most sense and why? Using your chosen discount rate, value the company based on your own growth rate calculation.

Reference no: EM132764126

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