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 a low stock price for the next year. Suppose we have the following information on a particular company overthe past four years.High priceLow priceEPSYear 1$ 28.6321.061.67Year 2$ 27.5221.381.80High target stock priceb. Low target stock priceYear 3$31.6226.851.93Earnings are projected to grow at 9% over the next year. (Do not round intermediate calculations and round your answer to 2decimal places, e.g., 32.16.)Year 4$38.2127.612.27a. What is your high target stock price over the next year?b. What is your low target stock price over the next year?DHE TEAUS

The stock price is the current market value of one share of a company's stock. It is influenced by a…

Answered: a. What is your high target stock price…

a. What is your high target stock price over the next year? b. What is your low target stock price over the next year? a. High target stock price b. Low target stock price H

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.

Question

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 a low stock price for the next year. Suppose we have the following information on a particular company over
the past four years.
High price
Low price
EPS
Year 1
$ 28.63
21.06
1.67
Year 2
$ 27.52
21.38
1.80
High target stock price
b. Low target stock price
Year 3
$31.62
26.85
1.93
Earnings are projected to grow at 9% over the next year. (Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)
Year 4
$38.21
27.61
2.27
a. What is your high target stock price over the next year?
b. What is your low target stock price over the next year?
DHE TE
AUS

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