If a Company Has a Current Stock Price of $37

question 229

Multiple Choice

If a company has a current stock price of $37, an EPS of $2.25/share; EPS growth rate of 15% and the investors rate of return is 15%, calculate the cash cow price.

• A) $15.00
• B) $15.50
• C) $16.00
• D) $16.50
• E) $17.00

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Definitions:

Shares Outstanding

The total number of a company's shares that are owned by shareholders, including both public and private entities, available in the market.

Current Asset

Assets that are expected to be converted into cash, sold, or consumed within one year or the normal operating cycle of the business, whichever is longer.

Statement Of Financial Position

Another term for a balance sheet; it shows a company's assets, liabilities, and equity at a specific point in time.

Intangible Asset

An asset that lacks physical substance but provides economic benefits to its owner, such as trademarks, patents, and goodwill.