### Computation of earnings per share

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##### Reference no: EM1356824

In late 2002, analysis was forecasting fiscal 2003 and 2004 earnings per share for Cisco systems of \$.54 and \$.61 respectively. Cisco's shares traded at \$15 at the time,. Assuming the long-term growth rate will be at 4 percent. The average rate of growth for gross national product, value Cisco using the model in equation in this chapter. Apply the formula to earnings rather than operating income and use a required return for equity of 9 percent.

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