Homework Answers
| Year | sales/share | Margin | PVF@10% | discounted value/share | ||||
| 1 | 19.2150 | 1.1529 | 0.9091 | 1.0481 | ||||
| 2 | 20.5120 | 1.2307 | 0.8264 | 1.0171 | ||||
| 3 | 21.8966 | 1.3138 | 0.7513 | 0.9871 | ||||
| 4 | 23.3746 | 1.4025 | 0.6830 | 0.9579 | ||||
| 5 | 24.9524 | 1.4971 | 0.6209 | 0.9296 | ||||
| 6 | 26.6367 | 1.5982 | 0.5645 | 0.9021 | ||||
| Total | 5.8419 | |||||||
| Value of share | = | cash flow/(cost of equity-growth) | ||||||
| = | 5.8419/(0.14-0.0375) | |||||||
| = | 5.8419/0.1025 | |||||||
| = | $57.00 | |||||||
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