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Palm Parameters High initial ROE Palm Long-term ROE Palm rE Palm # shares Palm stock Note: When you develop the expected earnings column, use the...

Palm Inc minicase chapter 2 by the Shefrin 1/e

Palm Parameters Palm FVE ? High initial ROE Palm 26% Palm FVE per share ? Long-term ROE Palm 16% rE Palm 16% Market Price ? # shares Palm stock 565,946,000 EPS1 ? P/E market ? Short-term dividend payout ratio 0% P/E fundamental ? Long-term dividend payout ratio 50% 1/rE ? Initial book value $1,110,640,000 Initial cash position $742,888,000 Initial cash position per share $1.31 CAP 6 FVE = ? Period ROE Earnings Dividends FVE Retained Earnings Book Value Computed as Discounted Dividends =Earnings-Dividends 0 ? ? 1 ? ? ? ? ? 2 ? ? ? ? ? 3 ? ? ? ? ? 4 ? ? ? ? ? 5 ? ? ? ? ? 6 ? ? ? ? ? ? 7 ? ? ? ? ? ? 8 ? ? ? ? ? ? 9 ? ? ? ? ? ? 10 ? ? ? ? ? ? 11 ? ? ? ? ? ? 12 ? ? ? ? ? ? 13 ? ? ? ? ? ? 14 ? ? ? ? ? ? 15 ? ? ? ? ? ? 16 ? ? ? ? ? ? 17 ? ? ? ? ? ? 18 ? ? ? ? ? ? 19 ? ? ? ? ? ? 20 ? ? ? ? ? ? 21 ? ? ? ? ? ? 22 ? ? ? ? ? ? 23 ? ? ? ? ? ? 24 ? ? ? ? ? ? 25 ? ? ? ? ? ? 26 ? ? ? ? ? ? 27 ? ? ? ? ? ? 28 ? ? ? ? ? ? 29 ? ? ? ? ? ? 30 ? ? ? ? ? ? 31 ? ? ? ? ? ? 32 ? ? ? ? ? ? 33 ? ? ? ? ? ? 34 ? ? ? ? ? ? 35 ? ? ? ? ? ? 36 ? ? ? ? ? ? 37 ? ? ? ? ? ? 38 ? ? ? ? ? ? 39 ? ? ? ? ? ? 40 ? ? ? ? ? ? Note: When you develop the expected earnings column, use the relationship Earnings = ROE x Book Value of Equity in prior year
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Palm Parameters Palm FVE ? High initial ROE Palm 26% Palm FVE per share ? Long-term ROE Palm 16% rE Palm 16% Market Price ? # shares Palm stock 565,946,000 EPS1 ? P/E market ? Short-term dividend payout ratio 0% P/E fundamental ? Long-term dividend payout ratio 50% 1/rE ? Initial book value $1,110,640,000 Initial cash position $742,888,000 Initial cash position per share $1.31 CAP 6 FVE = ? Period ROE Earnings Dividends FVE Retained Earnings Book Value Computed as Discounted Dividends =Earnings-Dividends 0 ? ? 1 ? ? ? ? ? ? 2 ? ? ? ? ? ? 3 ? ? ? ? ? ? 4 ? ? ? ? ? ? 5 ? ? ? ? ? ? 6 ? ? ? ? ? ? 7 ? ? ? ? ? ? 8 ? ? ? ? ? ? 9 ? ? ? ? ? ? 10 ? ? ? ? ? ? 11 ? ? ? ? ? ? 12 ? ? ? ? ? ? 13 ? ? ? ? ? ? 14 ? ? ? ? ? ? 15 ? ? ? ? ? ? 16 ? ? ? ? ? ? 17 ? ? ? ? ? ? 18 ? ? ? ? ? ? 19 ? ? ? ? ? ? 20 ? ? ? ? ? ? 21 ? ? ? ? ? ? 22 ? ? ? ? ? ? 23 ? ? ? ? ? ? 24 ? ? ? ? ? ? 25 ? ? ? ? ? ? 26 ? ? ? ? ? ? 27 ? ? ? ? ? ? 28 ? ? ? ? ? ? 29 ? ? ? ? ? ? 30 ? ? ? ? ? ? 31 ? ? ? ? ? ? 32 ? ? ? ? ? ? 33 ? ? ? ? ? ? 34 ? ? ? ? ? ? 35 ? ? ? ? ? ? 36 ? ? ? ? ? ? 37 ? ? ? ? ? ? 38 ? ? ? ? ? ? 39 ? ? ? ? ? ? 40 ? ? ? ? ? ? This worksheet is for you to develop the FVE of Palm when it pays out 100% of its earnings as dividends, as part of the PVGO approach.
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