Alcatel is a Australian telecommunications firm, paid dividends per share of 0.72 AUD on earnings per share of 1.25 AUD in 2000. The firm's earnings per share had grown at 12% over the prior 5 years but the growth rate is expected to decline linearly over the next 10 years to 5%, while the payout ratio remains unchanged. The beta for the stock is 0.8, the risk-free rate is 5.1% and the market risk premium is 4%. The intrinsic value of the stock is $ (Keep at least 2 decimal places)
Alcatel is a Australian telecommunications firm, paid dividends per share of 0.72 AUD on earnings per share of 1.25 AUD in 2000. The firm's earnings per share had grown at 12% over the prior 5 years but the growth rate is expected to decline linearly over the next 10 years to 5%, while the payout ratio remains unchanged. The beta for the stock is 0.8, the risk-free rate is 5.1% and the market risk premium is 4%. The intrinsic value of the stock is $ (Keep at least 2 decimal places)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Alcatel is a Australian telecommunications firm, paid dividends per share of 0.72 AUD on earnings per share of
1.25 AUD in 2000. The firm's earnings per share had grown at 12% over the prior 5 years but the growth rate is
expected to decline linearly over the next 10 years to 5%, while the payout ratio remains unchanged. The beta for
the stock is 0.8, the risk-free rate is 5.1% and the market risk premium is 4%.
The intrinsic value of the stock is $
(Keep at least 2 decimal places)
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