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CFA Level I Equity Valuation: Concepts and Basic Tools question

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Equity Valuation: Concepts and Basic Tools sample question

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Equity Investments

Equity Valuation: Concepts and Basic Tools

A packaging manufacturer just paid an annual dividend of USD 1.90 per share. The company earns a stable return on equity of 12.0% and pays out 40% of earnings as dividends, and both are expected to continue indefinitely. The required return on the shares is 11.0%. Using the sustainable growth rate and the Gordon growth model, the intrinsic value per share is closest to:

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