Projecting annual compounding rate of return using historical annual per share earnings growth rate: - Deepstash

Projecting annual compounding rate of return using historical annual per share earnings growth rate:

Predict the Future EPS using annual earnings growth rate

Now look for the range in which the stock’s PE ratio is and multiply the PE ratio to the EPS from previous step

Now add all the dividends collected during this period 

Repeat the process with the stock’s Highest PE ratio

 

After you get the future value of the stock just calculate R(compounding rate of return) using the formula for R

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