Finding value of shares using pe valuation method


1) You determined that B stock is expected to make earnings of $ 4.05 per share this year and that mean PE ratio for its industry is 27.195. Apply PE valuation method to find out the value of B shares.

2) The next expected annual dividend for S will be $ 1.10 per share, and analysts expect dividend to grow at annual rate of 7% indefinitely. If stock presently sells for $ 21 per share, what is the needed rate of return?

3) The next expected annual dividend for R will be= $ 1.11 per share, and analysts expect dividend to grow at annual rate of 7.1% indefinitely. If stock presently sells for $ 21 per share, what is the needed rate of return?

4) A stock has the beta of 2.1, risk free rate is 6%, and expected return on market is 10%. By using CAPM, determine the needed rate of return and the market risk premium?

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Finance Basics: Finding value of shares using pe valuation method
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