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

Residual Income 1 2 3 4 5 6 7 8 9 10 perpForecastYears2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Beginning BE (per share) $13.67 $13.73 $14.83 $15.38 $16.81 $18.36 $20.06 $21.80 $23.70 $25.35Earnings Per Share $1.61 $1.66 $1.71 $1.76 $1.82 $1.87 $1.93 $1.99 $2.05 $2.11Dividends per share $0.20 $0.20 $0.25 $0.25 $0.30 $0.30 $0.35 $0.35 $0.40 $0.40Ending BE (per share) 15.09 15.20 16.30 16.89 18.32 19.94 21.64 23.44 25.34 27.06Ke 0.0544"Normal" Income 0.74 0.75 0.81 0.84 0.91 1.00 1.09 1.19 1.29 1.38Residual Income (RI) 0.87 0.92 0.91 0.93 0.90 0.87 0.84 0.80 0.76 0.73 0.73Present Value of RI 0.83 0.82 0.77 0.75 0.69 0.63 0.58 0.52 0.47 0.43BV Equity (per share) 2004 16.11Total PV of RI (end 2004) 6.50Continuation (Terminal) Value 13.37PV of Terminal Value (end2004) 8.30Estimated Value (2004) $30.91Estimate April 1, 2005 Value $31.32Actual Price per shareGrowth 048