The Growth in Per Share FCFE of CBS, Inc

question 65

Multiple Choice

The growth in per share FCFE of CBS, Inc.is expected to be 10% per year for the next two years, followed by a growth rate of 5% per year for three years; after this five-year period, the growth in per share FCFE is expected to be 2% per year, indefinitely.The required rate of return on CBS, Inc.is 12%.Last year's per share FCFE was $2.00.What should the stock sell for today

• A)$8.99
• B)$22.51
• C)$40.00
• D)$25.21
• E)$27.12

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Definitions:

Senior Head Office

The central or main office location where senior management and key corporate functions are based.

Direct Labour-Hours

The total hours worked by employees directly involved in the production of goods or provision of services.

Manufacturing Overhead

Broad category of indirect production costs that are not directly tied to specific physical units produced, including maintenance, utilities, and rent.

DLH

A measurement representing the total hours contributed by workers directly involved in the manufacturing process.