Corporate FInance Assignment/ Professional Essay Writers
Company B: B is an unquoted shoe manufacturer. It has also suffered in the recent recession but the directors are confident that the company is past the worst and growth lies ahead:
– Earnings are expected to be 12.5 million € next year and expected to grow at 2% p.a.
– Dividends will be 5 million € for each of the next three years and then expected to grow at 3% thereafter.
Daniels has located a similar listed company that has an earnings yield of 12% and a cost of equity of 14%.
Calculate the value of Company B using the dividend valuation model:
a. 42.3 m €.
b. 43.2 m €.
c. 46.8 m €.
d. 47.3 m €. Get Finance Help Today