What is the likely price of the stock Active Gear Inc. reportedearnings per share (EPS) of$10.00 last year when itsstock price was $200.00.This year, its earningsincreased by 15%. If theP/E ratio remains constant,what is the likely price ofthe stock?

To determine the likely price of Active Gear Inc.'s stock this year, we first calculate last year's…

Answered: Active Gear Inc. reported earnings per…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 2MAD

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Active Gear Inc. reported earnings per share (EPS) of $10.00 last year when its stock price was $200.00. This year, its earnings increased by 15%. If the P/E ratio remains constant, what is the likely price of the stock?