if the question give growth rate for EPS in the future, and give current FCFE, ask to use FCFE model to calcuate the value of stock, we could not directly use the EPS growth rate for the FCFE growth, right? EPS is NI, need to adjusted to get FCFE… thanks.
that’s correct. EPS and FCFE won’t necessarily grow at the same rate. so you gotta go through the whole calculation.