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 firm's equity beta is 1.50, the risk-free rate is 2.45 percent, and the market risk premium is 6.0 percent. Dividends per share Return on equity Book value per share 2019 value per share Average price multiple Forecasted growth rate $ 2.38 8.50% $19.60 Earnings $ 5.00 13.10 13.65% Cash Flow $ 6.40 9.59 11.24% Sales $25.65 2.53 7.19% Using the PE, P/CF, and P/S ratios, estimate the 2020 share price for Beagle Beauties. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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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 firm's equity beta is 1.50, the risk-free rate is 2.45 percent, and the market risk
premium is 6.0 percent.
Dividends per share
Return on equity
Book value per share
2019 value per share
Average price multiple
Forecasted growth rate
$ 2.38
8.50%
$19.60
Using PE ratio
Using P/CF ratio
Using P/S ratio
Earnings Cash Flow
$5.00 $6.40
13.10
13.65%
9.59
11.24%
Using the PE, P/CF, and P/S ratios, estimate the 2020 share price for Beagle Beauties. (Do not round intermediate calculations.
Round your answers to 2 decimal places.)
Share Price
Sales
$25.65
2.53
7.19%
Transcribed Image Text: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 firm's equity beta is 1.50, the risk-free rate is 2.45 percent, and the market risk premium is 6.0 percent. Dividends per share Return on equity Book value per share 2019 value per share Average price multiple Forecasted growth rate $ 2.38 8.50% $19.60 Using PE ratio Using P/CF ratio Using P/S ratio Earnings Cash Flow $5.00 $6.40 13.10 13.65% 9.59 11.24% Using the PE, P/CF, and P/S ratios, estimate the 2020 share price for Beagle Beauties. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Share Price Sales $25.65 2.53 7.19%
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