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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
The Generic Genetic (GG) Corporation pays no cash dividends currently and is not expected to for the next 4 years. Its latest EPS was $5.9, all of which was reinvested in the company. The firm’s expected ROE for the next 4 years is 16% per year, during which time it is expected to continue to reinvest all of its earnings. Starting in year 5, the firm will payout all of its earnings as dividend and the firm’s ROE on new investments is expected to fall to 11% per year. GG’s market capitalization rate is 15% per year.
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| a. |
What is your estimate of GG’s intrinsic value per share? (Omit the "$" sign in your response. Round your answer to 2 decimal places.) |
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