If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio,we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year.Suppose we have the following information on a particular company:High price.Low priceEPSYear 1$ 90.8371.756.64Year 2 Year 3$129.19$107.05a. High target priceb. Low target price87.499.0674.698.72Year 4$140.50115.5810.31Earnings are expected to grow at 7.5 percent over the next year.a. What is the high target stock price over the next year?Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.b. What is the low target stock price over the next year?Note: Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.

Earnings per share (EPS) shows how much of a company's profits are distributed to each outstanding…

a. What is the high target stock price over the next year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the low target stock price over the next year? Note: Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.

a. What is the high target stock price over the next year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the low target stock price over the next year? Note: Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter13: Direct Foreign Investment

Section: Chapter Questions

Problem 1IEE

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If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company: High price. Low price EPS Year 1 $ 86.77 69.09 6.50 Year 2 Year 3 $97.67 $118.97 81.47 8.92 82.11 8.58 Year 4 $130.84 108.02 10.17 Earnings are expected to grow at 8 percent over the next year. a. What is the high target stock price over the next year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the low target stock price over the next year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. > Answer is complete but not entirely correct. a. High target price $ 136.23 b. Low target price $ 101.58
If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company: High price Low price EPS Year 1 $89.09 70.61 6.58 Year 1 Year 2 Year 3 Year 4 Year 2 $103.03 84.91 9.00 High PE Earnings are projected to grow at 8 percent over the next year. What are the high and low PE ratios for each year? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Year 3 $124.81 77.87 8.66 Low PE Year 4 $136.36 112.34 10.25
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