Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2019. Also assume that the firm’s equity beta is 1.50, the risk-free rate is 2.45 percent, and the market risk premium is 9.0 percent. Dividends per share $ 2.18 Return on equity 11.50 % Book value per share $ 18.10 Earnings Cash Flow Sales 2019 value per share $ 5.00 $ 6.50 $ 25.65 Average price multiple 13.10 9.49 2.43 Forecasted growth rate 13.55 % 11.34 % 7.22 % Using the PE, P/CF, and P/S ratios, estimate the 2020 share price for Beagle Beauties. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

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