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 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.Year 1$ 62.1840.302.35a. High target priceb. Low target priceYear 2$67.2943.182.58Year 3-$74.1839.272.73Year 4$78.2746.21High priceLow priceEPSEarnings are expected to grow at 9 percent over the next year.6. What is the high target stock price in one year?32.16.Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g..b. What is the low target stock price in one year?Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.2.890

The growth rate of EPS in year 5 is 9%.

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 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. $62.18 40.30 2.35 a. High target price. b. Low target price Year 21 $ 67.29 43.18 Year 31 $74.18 39.27 2.73 Earnings are expected to grow at 9 percent over the next year. o. What is the high target stock price in one 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 in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. D Year 4. $78.27 46.21 2.89

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 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. $62.18 40.30 2.35 a. High target price. b. Low target price Year 21 $ 67.29 43.18 Year 31 $74.18 39.27 2.73 Earnings are expected to grow at 9 percent over the next year. o. What is the high target stock price in one 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 in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. D Year 4. $78.27 46.21 2.89

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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A stock analyst at JP Dealers believes that a stock will earn the following returns next period depending on the state of the economy. Given the information below, what is the expected return on the stock? State of Economy Probability Return if State Occurs Depression 30% -10% Normal 50% 11% Boom 20% 18% Enter answer in decimal form, rounded to 4th digit, as in "0.1234"
Historical nominal returns for Company A have been 8% and -20%. The nominal returns for the market index S&P500 over the same periods were -15% and 28%. Calculate the beta for Company A. Please include equations used. Thanks
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