Current EPS=$5.5 Current Div Paid/sh = $2.8 Required Return = 13% Expected constant g = 6.8% Leading P/E?
EPS = .51/(.13-.068) = 8.21 new one… your missing the price per share?
8.21?
Northeastern Student Wrote: ------------------------------------------------------- > EPS = .51/(.13-.068) = 8.21 new one… your > missing the price per share? How did you get .51? What represents the numerator? Can we get trailing P/E with the same data? Thx.
.51 = (2.8/5.5) what is paid out!
hyang Wrote: ------------------------------------------------------- > Northeastern Student Wrote: > -------------------------------------------------- > ----- > > EPS = .51/(.13-.068) = 8.21 new one… your > > missing the price per share? > > How did you get .51? What represents the > numerator? Can we get trailing P/E with the same > data? Thx. Technically, you can use that data and just divide the intrinsic value by the EPS, but who would do that? Trailing P/E is based off historical data.
Payout ratio = 2.8/5.5 = 51% next years div. = 2.8 x 1.068 = 2.99 next years earnings = 2.99/0.51 = 5.86 [assuming payout ratio remains constant] this years stock price =2.99 / (0.13 - 0.068) = 48.22 therefore FWD P/E = 48.22 / 5.86 = 8.23
Super, Farina!
No probs. To answer your Q above, the trailing is just the current price of common equity divided by this years earnings, 8.76.