Bill's Bakery expects earnings per share of $2.10 next year. Current book value is $3.80 per share. The appropriate discount rate for Bill's Bakery is 12 percent. Calculate the share price fo...

Question

Question

Bills Bakery expects earnings per share of $2.10 next year. Current book value is $3.80 per share. The appropriate discount

Answer 1

Answer #1

Share price =Book value+(EPS-(Book value*rate))/(rate-growth)

Share price =3.8+(2.1-(3.8*0.12))/(0.12-0.025)

Share price = 21.11

Answer 2

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