Business Valuation of Polo Ralph Lauren Corporation - Mark Moore ...

Abnormal EarningsGrowth 1 2 3 4 5 6 7 8 9 PerpForecast Years2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014EPS $1.61 $1.66 $1.71 $1.76 $1.82 $1.87 $1.93 $1.99 $2.05 $2.11DPS $0.20 $0.20 $0.25 $0.25 $0.30 $0.30 $0.35 $0.35 $0.40 $0.40DPS invested at 5.44% $0.02 $0.02 $0.02 $0.02 $0.02 $0.02 $0.03 $0.03 $0.03Cum-Dividend Earnings $1.68 $1.73 $1.78 $1.84 $1.90 $1.95 $2.01 $2.07 $2.14Normal Earnings $1.61 $1.66 $1.71 $1.76 $1.82 $1.87 $1.93 $1.99 $2.05Abnormal Earning Growth (AEG) $0.06 $0.07 $0.07 $0.07 $0.08 $0.08 $0.09 $0.09 $0.09 $0.00PV Factor 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540PV of AEG $0.06 $0.06 $0.06 $0.05 $0.05 $0.05 $0.05 $0.05Core EPS $1.61Total PV of AEG $0.43Continuing (Terminal) ValueFV ofPerp. $0.00PV of Terminal Value $0.00Total PV of AEG $0.43Average Perpetuity $2.04Capitalization Rate (perpetuity) $0.054Value Per Share pv $37.54 1-Apr-04 $38.04fv $38.27 1-Apr-05 $38.78Ke 0.08g 0.0347