A company is valuing its equity prior to an initial public offering (IPO).

A company is valuing its equity prior to an initial public offering (IPO).

Relevant data:

• Earnings per share $1.00

• WACC is 8% and the cost of equity is 12%

• Dividend payout ratio 40%

• Dividend growth rate 2% in perpetuity

The current share price using the Dividend Valuation Model is closest to:
A . $4.08
B . $6.12
C . $6.80
D . $4.00