Week 7 Homework

.xlsx

School

Maryville University *

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Course

312

Subject

Finance

Date

Jun 10, 2024

Type

xlsx

Pages

12

Uploaded by MissRedDevil

The Dahlia Flower Company has earnings of $3.64 per share. The benchmark P What if the benchmark PE were 21? EPS 3.64 Benchmark PE 18 Benchmark PE 21 stock at 18 65.52 stock at 21 76.44    What stock price would you consider appropriate?  (Do not round intermed round your answer to 2 decimal places, e.g., 32
PE for the company is 18. diate calculations and 2.16.)
What is the current PE ratio for each com What is the current PE ratio for each com Atlantic Energy has a new project that will increase earnings by $350,000 in perp Pacific Atlantic earings $ 790,000.00 $ 790,000.00 return 11% 11% value of company $ 7,181,818.18 $ 7,181,818.18 PE Ration 9.09 9.09 Change in Earning $ 175,000.00 $ 350,000.00 new Earnings $ 965,000.00 $ 1,140,000.00 new value $ 8,772,727.27 $ 10,363,636.36 New PE Ration 11.10 13.12 Consider Pacific Energy Company and Atlantic Energy, Incorporated, both of which rep both firms will continue to generate earnings of $790,000 in perpetuity. Assume that a require a return of 11 percent. Pacific Energy Company has a new project that will generate additional earnings of $17 ratio of the company
mpany? mpany? petuity. Calculate the new PE ratio of the firm. ported earnings of $790,000. Without new projects, all earnings are paid as dividends and that both firms 75,000 each year in perpetuity. Calculate the new PE
The Dahlia Flower Company has earnings of $1.85 per share. The benchmark PE f EPS 1.85 benchmark PE 15 benchmark PE 18 What stock price would you consider appropriate? stock price 27.75 What if the benchmark PE were 18? stock price 33.30
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