Encore International Case Study

There Is a difference In the values as there Is a difference In the growth rate. In part a, the stock price Is based on current book value. In part d value f stock Is calculated by delving model of growth rate and growth taken up Is consistent. The firm’s current PIE ratio Is 6% the current required return Is 9. 08% and the new required return assuming the firm expands Into European and Latin Americans markets goes as planned Is 9.

74%.

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Providing the securities analysts are correct and there Is no growth In future dividends, the value per share of Encore stock $113. 37 and $50. 82 By crawlspace It is impossible to predict in the fashion industry as success is contingent upon trends of the public. There is however a way to predict what the market should yield by virtue of data available.

The firm’s current book value per share is forty and twenty four dollars. There is a difference in the values as there is a difference in the growth rate.

In part a, the stock price is based on current book value. In part d value of stock is calculated by dividing model of growth rate and growth taken up is consistent. The firm’s current PIE ratio is 6% the current required return is 9. 08% and the new required return assuming the firm expands into European and Latin Americans markets goes as planned is 9.

74%. Providing the securities analysts are correct and there is no growth in future dividends, the value per share of Encore

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