Bill's Bakery expects earnings per share of $3.38 next year. Current book value is $5.40 per share. The appropriate discount rate for Bill's Bakery is 10 percent. Calculate the share price for Bill's Bakery if earnings grow at 5.00 percent forever. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Share price 60.18
Bill's Bakery expects earnings per share of $3.38 next year. Current book value is $5.40 per share. The appropriate discount rate for Bill's Bakery is 10 percent. Calculate the share price for Bill's Bakery if earnings grow at 5.00 percent forever. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Share price 60.18
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
Problem 1PS
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Transcribed Image Text:Bill's Bakery expects earnings per share of $3.38 next year. Current book value is $5.40 per share. The appropriate discount rate for
Bill's Bakery is 10 percent. Calculate the share price for Bill's Bakery if earnings grow at 5.00 percent forever. (Do not round
intermediate calculations. Round your answer to 2 decimal places.)
Answer is complete but not entirely correct.
Share price
60.18
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