Please help - We want to compute the price of Pabon. It has 2 m...
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Please help - We want to compute the price of Pabon. It has 2 m shares outstanding and $80 of book value of equity. Pabon expects to sell $20m worth of sales and have EAT of $5m and keep 40% of its profit. Furthermore, it has $100m of assets. Its short term assets grew by $13 million and short term liabilities by $4 million. Moreover, it has depreciation charges of 5% of its assets. Its coe is .12 and its bheta is 1.2. Calculate Pabons value.
We have the following information for the Valverde company. The stock pays a $1 dividend and it will grow by 12% the first year, 9% the second year and 3% forever after that. The unlevered bheta is 1, D/E is 75/25 and the tax rate is .3. Additionally, we know the treasury bond rate is .04, and the ROR of the S&P has been 10%. Derive the stock price of Valverde.
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