题目
题目

COMM_V 298 101 102 103 2025W1 Class 9 and 10 Practice Quiz

多重下拉选择题

Pratt Inc. manufactures aircraft parts. Pratt has expected earnings per share (EPS) of $7.50 for the next year and just paid a dividend of $3.75. The growth rate expected is 3% in perpetuity, and investors require an 8% return. The share is currently selling for $75 per share. A very good comparable company, Whitney Co. has a P/E ratio of 15. Part A: What is your estimate estimate of Pratt Inc.'s share price, using a comparable firms valuation method? [ Select ] $112.50 $150.00 $7.50 $75.00 $56.25 Part B: What does the share price calculated in Part A tell you about the current value of Pratt Inc.? The share price calculated in Part A is higher than the current value of $75, meaning that Pratt Inc. is currently undervalued , according to the multiples valuation method. Part C: Using a discounted cash flow valuation model instead, what is your best estimate of Pratt's share price? $77.25 , which is [ Select ] lower higher than the current value of $75, meaning that Pratt Inc. is currently [ Select ] overvalued correctly valued undervalued , according to the discounted cash flow valuation method.

查看解析

查看解析

标准答案
Please login to view
思路分析
To begin, let's restate the scenario and the answer options for clarity across all parts. Part A presents a comparables-based valuation. The relevant options for the estimate are: $112.50, $150.00, $7.50, $75.00, and $56.25. The setup gives Pratt Inc. with an expected EPS of $7.50 next year, a growth rate of 3% in perpetuity, and investors require an 8% return. A very good comparable, Whitney Co., trades at a P/E ratio of 15. The question asks for the comparable firms valuation of Pratt’s share price. Analysis of Part A options: - $112.50: This is the product of Pratt’s expected EPS ($7.50) times Whitney’s P/E (15), i.e., 7.50 × 15 = 112.50. This aligns with the typical use of a price-to-earnings multip......Login to view full explanation

登录即可查看完整答案

我们收录了全球超50000道考试原题与详细解析,现在登录,立即获得答案。

类似问题

Which of the following are reasons that you should care about stock valuation (according to the text)? 

If the current risk free-rate is 6%, what should the current price of a stock be if its price and dividend next year are forecast to be $122 and $7, respectively, and its risk premium is 4%.

Suppose you are willing to pay $30 today for a share of stock which you expect to sell at the end of one year for $32. If you require an annual rate of return of 12 percent, what must be the amount of the annual dividend which you expect to receive at the end of year 1? Select the closest answer.[Fill in the blank]

Assume that your valuations lead to an estimated share price of $39.80. Quizzer’s actual current share price is $37.90. Would you recommend buying or selling shares in Quizzer? 

更多留学生实用工具

加入我们，立即解锁 海量真题 与 独家解析，让复习快人一步！