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Telus, a Canadian wireless comunications company, earned $3.38 per share in 2010 and paid dividends of $1.70 per share. Analysts forcast an annual earnings growth rate of 7% for the next 5 years. Based on similar-risk companies, the estimated requrired rate of return on Telus stock is 8.9%. It is assumed that after 2015 onward, Telus will maintain its current reinvestment rate but earn only its cost of capital of new investments.

Estimate Telus' current stock price at the beginning of 2011.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92081455

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