Pratt Inc. manufactures aircraft parts. Pratt has expected earnings per share (EPS) of $7.50 for the next year and just paid a dividend of $3.75. The growth rate expected is 3% in perpetuity, and investors require an 8% return. The share is currently selling for $75 per share. A very good comparable company, Whitney Co. has a P/E ratio of 15. Part A: What is your estimate estimate of Pratt Inc.'s share price, using a comparable firms valuation method? [ Select ] $112.50 $150.00 $7.50 $75.00 $56.25 Part B: What does the share price calculated in Part A tell you about the current value of Pratt Inc.? The share price calculated in Part A is higher than the current value of $75, meaning that Pratt Inc. is currently undervalued , according to the multiples valuation method. Part C: Using a discounted cash flow valuation model instead, what is your best estimate of Pratt's share price? $77.25 , which is [ Select ] lower higher than the current value of $75, meaning that Pratt Inc. is currently [ Select ] overvalued correctly valued undervalued , according to the discounted cash flow valuation method.多重下拉选择题
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