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Group Assignment2

Your boss believes the stock price of Corus is incorrect and wants you to determine the accurate price per share to pay. With information from a friend at a securities firm, you learn Corus' sales over the next 3 years are expected to increase by 10%, 15%, and 20% respectively, while costs of sales will rise 5% annually and selling/admin expenses will increase by 3% yearly. You need to calculate the terminal value of Corus to estimate its value and the price per share you are willing to pay for the target stock.

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Beshoy Girgis
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15 views

Group Assignment2

Your boss believes the stock price of Corus is incorrect and wants you to determine the accurate price per share to pay. With information from a friend at a securities firm, you learn Corus' sales over the next 3 years are expected to increase by 10%, 15%, and 20% respectively, while costs of sales will rise 5% annually and selling/admin expenses will increase by 3% yearly. You need to calculate the terminal value of Corus to estimate its value and the price per share you are willing to pay for the target stock.

Uploaded by

Beshoy Girgis
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Group Assignment 2

Your boss believes that the stock is mispriced. Can you help figure out what is the correct price that you should be willing to pay. You have a friend at a securities firm who helps you with the following information According to his research sales at Corus are expected to increase 1 !" 1#!"#!" 1!"2! respectively in the following # years and cost of sales will increase at the rate of #! per year$ selling and admin expenses will increase %! each year. &etermine the new 'erminal value of the firm and your estimate of the value of the firm and what price per share you would be willing to pay for the target

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