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    short-term and long-term growth rates

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    In late 2002, analysts were forecasting fiscal 2003 and 2004 earnings per share for Cisco Systems of $0.54 and $0.61, 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. Apply the formula to earnings rather than operating income and use a required return for equity of 9 percent.

    Answer must be: $10.75/share.

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    https://brainmass.com/economics/fiscal-policy/short-term-long-term-growth-rates-253890

    Solution Summary

    Apply the formula to earnings rather than operating income and use a required return for equity of 9 percent.

    $2.19