Principles of Corporate Finance_ 12th Edition

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Chapter 2 How to Calculate Present Values 45


bre44380_ch02_019-045.indd 45 09/02/15 03:42 PM


Finance.yahoo.com is a marvelous source of stock price data. You should get used to using it.



  1. Go to finance.yahoo.com and look up “Analyst Estimates” for Apple (AAPL). You should
    find earnings per share (EPS) for the current year, the percentage annual growth rate of EPS
    for the past five years, and also a five-year EPS growth-rate forecast. What will be Apple’s
    EPS after five years if EPS grows at the five-year historical average rate? What will EPS be
    if it grows at the analysts’ forecasted rate? Try the same exercise for other stocks, for example
    Microsoft (MSFT), Merck (MRK), or the railroad CSX (CSX).

  2. You need to have accumulated savings of $2 million by the time that you retire in 20 years.
    You currently have savings of $200,000. How much do you need to save each year to meet
    your goal if your savings earn a return of 10%? Find the savings calculator on f ina nce.ya hoo
    .com to check your answer.


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