You have found the following historical information for DEF Company: Year 2 Year 3 Year 4 Year1 Stock Price $45.38 $54.31 $59.3 $50.08 EPS $2.37 $2.4 $3 $3.48 Earnings are expected to grow at 8 percent for the next year. Using the company's historical average PE as a benchmark, what is the target stock price in one year? Answer to two decimals.

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter15: Capital Investment Analysis
Section: Chapter Questions
Problem 15.1.2MBA
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You have found the following historical information for DEF Company:
Year 2
Year 3
Year 4
Year1
Stock Price
$45.38
$54.31
$59.3
$50.08
EPS
$2.37
$2.4
$3
$3.48
Earnings are expected to grow at 8 percent for the next year. Using the company's historical average
PE as a benchmark, what is the target stock price in one year? Answer to two decimals.
Transcribed Image Text:You have found the following historical information for DEF Company: Year 2 Year 3 Year 4 Year1 Stock Price $45.38 $54.31 $59.3 $50.08 EPS $2.37 $2.4 $3 $3.48 Earnings are expected to grow at 8 percent for the next year. Using the company's historical average PE as a benchmark, what is the target stock price in one year? Answer to two decimals.
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