b) 0 1 $3.55 $ 3.91 $ Calculate the price of MSFT using the PE Ratio to calculate the Terminal Value.(assume Net Income per share of $5.93 on year 3) Year FCFE 3 2 4.30 $ 4.42 F101*(1+G102) Growth Rate 10% 10% Terminal Value Cash Flows $ 3.91 $4.30 $69.53 =G101+G103 Share Price 3.0% $65.10 G101*(1+G102)/(C82-G102) $59.34 =NPV(C82,E104:G104)

b) 0 1 $3.55 $ 3.91 $ Calculate the price of MSFT using the PE Ratio to calculate the Terminal Value.(assume Net Income per share of $5.93 on year 3) Year FCFE 3 2 4.30 $ 4.42 F101(1+G102) Growth Rate 10% 10% Terminal Value Cash Flows $ 3.91 $4.30 $69.53 =G101+G103 Share Price 3.0% $65.10 G101(1+G102)/(C82-G102) $59.34 =NPV(C82,E104:G104)

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.1.1MBA

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