Homework Answers
P0 = EPS0 * PE Ratio
EPS0 = EPS1 / (1+g)
g = b * r
= 0.2 * 0.13
= 0.026
EPS0 = EPS1 / (1+g)
= $ 7 / (1+0.026)
= $ 7 / 1.026
= $ 6.8226
P0 = EPS0 * PE Ratio
= $ 6.8226 * 7.017
= $ 47.87
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