10. Lauren Entertainment, Inc., has an 18 percent annual growth rate compared to the mar- ket rate of 8 percent. If the market multiple is 18, determine P/E ratios for Lauren Enter- tainment, Inc., assuming that its beta is 1.0 and you feel it can maintain its superior growth rate for the next: a. 10 years. b. 5 years.

10. Lauren Entertainment, Inc., has an 18 percent annual growth rate compared to the mar- ket rate of 8 percent. If the market multiple is 18, determine P/E ratios for Lauren Enter- tainment, Inc., assuming that its beta is 1.0 and you feel it can maintain its superior growth rate for the next: a. 10 years. b. 5 years.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 12P: Calculation of gL and EPS Spencer Suppliess stock is currently selling for 60 a share. The firm is...

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Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?
Calculation of gL and EPS Spencer Suppliess stock is currently selling for 60 a share. The firm is expected to earn 5.40 per share this year and to pay a year-end dividend of 3.60. a. If investors require a 9% return, what rate of growth must be expected for Spencer? b. If Spencer reinvests earnings in projects with average returns equal to the stocks expected rate of return, then what will be next years EPS? [Hint: gL = ROE Retention ratio.)
Lauren Entertainment, Inc., has an 16 percent annual growth rate compared to the market rate of 6 percent. If the market multiple is 18, determine P/E ratios for Lauren Entertainment, Inc., assuming its dividend yield is zero, its beta is 1.00 and you feel it can maintain its superior growth rate for: 1.the next 12 years. Do not round intermediate calculations. Round your answer to two decimal places. 2. the next 6 years. Do not round intermediate calculations. Round your answer to two decimal places.
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