he common stock of Permanent Assurance Corporation currently trades at $40.00 per share, which is approximates its intrinsic value. The company has announced plans to maintain its dividend next year at $1.20 per share. Your research indicates that historically, the firm's dividend payout ratio has averaged 50% while its return on equity averaged 9.0%. The book value of the shares is $25.00 and research shows there is relatively low variation in the firm's operations. You believe the firm's payout ratio and ROE should continue at their historic levels in the future over the long term. Enter your answers on the spreadsheet Estimate the long-term growth rate for the firm’s EPS, cash flow, and dividends based on the absolute approach and round to 2 decimals. Long-term growth rate:
16 - The common stock of Permanent Assurance Corporation currently trades at $40.00 per share, which is approximates its intrinsic value. The company has announced plans to maintain its dividend next year at $1.20 per share. Your research indicates that historically, the firm's dividend payout ratio has averaged 50% while its
Estimate the long-term growth rate for the firm’s EPS, cash flow, and dividends based on the absolute approach and round to 2 decimals.
Long-term growth rate:
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