Pick a comparable company that can serve as a benchmark for

Reference no: EM13394756

1.What is the current stock price of Visa?

2.What is their trailing EPS?

3.What is the consensual estimate for their next fiscal year end EPS?

4.What is the consensual 5-year growth rate for their earnings?

5.Compute trailing PE ratio, forward PE ratio, and PEG ratio.

6.Pick a comparable company that can serve as a benchmark for your P/E analysis.Indicate which company you choose for benchmark.Calculate and report the trailing PE ratio, forward PE ratio, and PEG ratio for your benchmark.

7.Does Visa appear to be overvalued or undervalued relative to the benchmark stock, based on the three different measures?

8.List two to three reasons why the PE ratio analysis is problematic. Support your argument with examples based on the numbers for Visa and your benchmark company.

9.An alternative approach to compute a price for Visa will be to use the dividend discount model.

10.Can we use this growth rate to compute a “fair” price for Visa using the constant growth dividend model? If not, why not?

Reference no: EM13394756

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