Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2015. Also assume that the firm's equity beta is 1.40, the risk-free rate is 2.05 percent, and the market risk premium is 6.1 percent. Dividends per share Return on equity Book value per share 2015 value per share Average price multiple Forecasted growth rate Using P/E ratio Using P/CF ratio Using P/S ratio $ 2.28 8.50% $17.15 Share price Earnings Cash Flow $5.20 $ 6.70 13.30 9.48 13.52% 11.510 Sales $25.75 2.44 Using the P/E, P/CF, and P/S ratios, estimate the 2016 share price for Beagle Beauties. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 7.461

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look
glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values
provided are from year-end 2015. Also assume that the firm's equity beta is 1.40, the risk-free rate is 2.05 percent, and the market risk
premium is 6.1 percent.
Dividends per share
Return on equity
Book value per share
2015 value per share
Average price multiple
Forecasted growth rate.
Using P/E ratio
Using P/CF ratio
Using P/S ratio
$ 2.28
8.50%
$17.15
Share price
Earnings Cash Flow
$5.20 $6.70
13.30
9.48
13.52% 11.51%
Using the P/E, P/CF, and P/S ratios, estimate the 2016 share price for Beagle Beauties. (Do not round intermediate calculations.
Round your answers to 2 decimal places.)
Sales
$25.75
2.44
7.46%
Transcribed Image Text:A Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2015. Also assume that the firm's equity beta is 1.40, the risk-free rate is 2.05 percent, and the market risk premium is 6.1 percent. Dividends per share Return on equity Book value per share 2015 value per share Average price multiple Forecasted growth rate. Using P/E ratio Using P/CF ratio Using P/S ratio $ 2.28 8.50% $17.15 Share price Earnings Cash Flow $5.20 $6.70 13.30 9.48 13.52% 11.51% Using the P/E, P/CF, and P/S ratios, estimate the 2016 share price for Beagle Beauties. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Sales $25.75 2.44 7.46%
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