PRBI has been experiencing double-digit growth rates in revenues and cash flows and high growth is expected to persist for 10 more years
Required return on equity 12.40% Weighted average cost of capital (WACC) 10.60% Dividend payout ratio 60% Most recent earnings per share $5.33 Dividends and earnings growth rate over next 10 years (i.e., Years 1 to 10) 15.00% Dividends and earnings growth rate after Year 10 4.00% Current stock price $70.00
Using the data in above, the estimate of PRBI’s stock according to the H-model is closest to:
- $64.76.
- $77.12.
- $60.60.
Can someone explain to me why the answer is 60.60???