Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. beagle beauties engages in the development, manufa

Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed...

60.1K

Verified Solution

Question

Finance

Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2019. Also assume that the firms equity beta is 1.20, the risk-free rate is 2.40 percent, and the market risk premium is 9.0 percent.

Dividends per share $ 2.16
Return on equity 11.50 %
Book value per share $ 17.95

Earnings Cash Flow Sales
2019 value per share $ 5.00 $ 6.50 $ 25.65
Average price multiple 13.10 9.48 2.42
Forecasted growth rate 13.54 % 11.35 % 7.04 %

The required return is 13.20 percent. Use the clean surplus relationship to calculate the share price for Beagle Beauties with the residual income model. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Chemistry
1.2K views

1.What values of x,  y and z balance the equation: x SO2    +   y H+   +    Cr2O72– → 3 SO42–  + z Cr3+ +   H2O ? 2.What...

Basic Math
1.2K views

Rewrite the following rectangular equation in polar form.y=3x

Accounting
1.2K views

Required information [The following information applies to the questions displayed below.) James Company...

Accounting
1.2K views

1) Present, in journal form, the adjustments that would be made on July 31, 2018,...

Accounting
1.2K views

Commenced business with cash RM200,000, land RM50,000, and equipment RM35,000. Purchased...

Accounting
1.2K views

Kehoe Co. utiliza un sistema de inventario peridico. La empresa tena un inventario inicial de...

Accounting
1.2K views

Pepper, Inc. agrees to lease equipment from the Blue Corporation for 10 years at $25,000...

Accounting
1.2K views

Exercise 12-2 Dropping or Retaining a Segment [LO12-2] The Regal Cycle Company manufactures three types...

Accounting
1.2K views

Identify four risks associated with IT systems in accounting. For each of the four risks,...

Accounting
1.2K views

Which of the following is an example of an activity cost driver? Deciding how...

Finance
1.2K views

Suppose you have a project that has a 0.3 chance of tripling your investment in...

Finance
1.2K views

Question 7 What is a risk reversal? What might you infer if a risk reversal...