Bill’s Bakery has current earnings per share of $3.54. Current book value is $5.6 per share....
Bill’s Bakery has current earnings per share of $3.54. Current book value is $5.6 per share. The appropriate discount rate for Bill’s Bakery is 12 percent. Calculate the share price for Bill’s Bakery if earnings grow at 3.7 percent forever. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
What is the:
Share Price $_______
Homework Answers
share price = current EPS *(1+ growth rate) / (required return- growth rate)
=>$3.54* (1+0.037) / (0.12-0.037)
=>3.67098 / 0.083
=>$44.23.
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Bill’s Bakery has current earnings per share of $3.54. Current
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