Riskfree rate 0.02 Market rate 0.15 1. Use the information below and the Combined Dividends &...

Riskfree rate 0.02 Market rate 0.15

1. Use the information below and the Combined Dividends & Earnings Model to find ABB’s value. (Remember that the EPS and dividend for t+1 are given.)

	t+1	t	t-1	t-2	t-3
EPS	$1.50
Dividend	1.01
DPO		0.74	0.69	0.60
ROE		0.15
Beta		1.10
P/E			19.2	23.5	22.9
Shares outstanding		2,130	mill

2. Use the info below and the CD&E model to find ArcBest’s value.

	t+1	t	t-1	t-2	t-3
EPS	$4.15
Dividend	0.25
DPO		0.08	0.08	0.08
ROE		0.125
Beta		1.7
P/E			10.4	20.5	22.1
Shares outstanding		530	mill

Expert Solution

jeff jeffy answered 2 years ago

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