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
Related questions
Question
Find the share price given the following information. The setup here is all correct, but the answer should be $66.61 per share. What am I doing wrong? Discount rate (Ke) = 10%.
Transcribed Image Text: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)
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