What is ggs estimated intrinsic value per share assuming


The Generic Genetic corporation pays no cash dividends currently and is not expected tp for the next 4yrs. Its latest EPS was $5 all of which was reinvested in the company.The firm's next expected ROE for the next 4years is 20% per year, during which time it is expected to continue to reinvest all its earnings. Starting year 5,the firm's expected ROE on new investments is expected to fall to 15% per year. GG's market capitalisation rate is 15% per year. a) What is GG's estimated intrinsic value per share? b) Assuming its current market price is equal to its intrinsic value, what do u expect to happen to price over the next year?

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Financial Management: What is ggs estimated intrinsic value per share assuming
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