Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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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 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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Transcribed Image Text: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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