Why should I choose AnalystNotes?
Simply put: AnalystNotes offers the best value and the best product available to help you pass your exams.
Basic Question 0 of 9
A company's current BVPS is $50. Consensus EPS estimates for the next two years are $6 and $8. After the second year residual income is expected to be equal to year 2's economic profits indefinitely. The required rate of return on equity is 10%. It is not expected to pay dividends. The company's intrinsic value per share is ______.
User Contributed Comments 2
| User | Comment |
|---|---|
| ssradja | Don't forget that BV goes up by EPS - D |
| quanttrader | last term is PV of RI perpetuity |
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh
Learning Outcome Statements
explain put-call parity for European options
CFA® 2025 Level I Curriculum, Volume 5, Module 9.