Maximum marks: 2 13 Question 2.3 Reverse engineering growth rates (2 points) The share of Techcompany Inc was traded at $60 with a price-to-book value of 3 at the end of 2022. The forecast for 2023 on earnings per share is $4. Your required return for equity is 10%. What is the markets estimated growth rate for residual earnings for the period after 2023? Give your answer in % and with two decimals: Maximum marks: 2 14 Question 2.4 - Forecasting and valuation (2 points) Consider the attached reformulated balance sheet and income statement for a firm's 2022 fiscal year with a tax rate of 30%. Asset turnover is 1.19 and the operating profit margin is 14.99%, both are constant over the years. Assuming that the sales forecast is 8% per year, and the required return is 9.8% per year, calculate the following. What is the forecasted residual operating income (ReOI) for 2023:

Maximum marks: 2 13 Question 2.3 Reverse engineering growth rates (2 points) The share of Techcompany Inc was traded at $60 with a price-to-book value of 3 at the end of 2022. The forecast for 2023 on earnings per share is $4. Your required return for equity is 10%. What is the markets estimated growth rate for residual earnings for the period after 2023? Give your answer in % and with two decimals: Maximum marks: 2 14 Question 2.4 - Forecasting and valuation (2 points) Consider the attached reformulated balance sheet and income statement for a firm's 2022 fiscal year with a tax rate of 30%. Asset turnover is 1.19 and the operating profit margin is 14.99%, both are constant over the years. Assuming that the sales forecast is 8% per year, and the required return is 9.8% per year, calculate the following. What is the forecasted residual operating income (ReOI) for 2023:

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 12P: Calculation of gL and EPS Spencer Suppliess stock is currently selling for 60 a share. The firm is...

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