Financial accounting Canyon Industries has historically maintained a P/Eratio of 18.5, which analysts consider a reliable estimatefor future valuation. The company currently reportsearnings per share (EPS) of $3.75. Managementprojects that earnings will grow by 4.2% in the comingyear.What is the expected price of Canyon Industries' stockone year from now?

Step 1: Define Price-to-Earnings (P/E) RatioThe Price-to-Earnings (P/E) Ratio is a valuation metric…

Answered: Canyon Industries has historically…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 3P: Smiley Corporations current sales and partial balance sheet are shown here. Sales are expected to...

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Vijay
Meadow Dew Corporation currently has an EPS of $2.30, and the benchmark PE for the company is 22. Earnings are expected to grow at 5 percent per year. a. What is your estimate of the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the target stock price in one year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Assuming the company pays no dividends, what is the implied return on the company’s stock over the next year?
What is the expected price of this stock one year from now on these financial accounting question?
Meadow Dew Corporation currently has an EPS of $3.80, and the benchmark PE for the company is 37. Earnings are expected to grow at 10 percent per year. a. What is your estimate of the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the target stock price in one year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Assuming the company pays no dividends, what is the implied return on the company’s stock over the next year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Currently, a firm has an EPS of $2.13 and a benchmark PE of 18.64. Earnings are expected to grow by 3.8 percent annually. What is the estimated current stock price?
Meadow Dew Corporation currently has an EPS of $4.00, and the benchmark PE for the company is 39. Earnings are expected to grow at 5 percent per year. a. What is your estimate of the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the target stock price in one year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Assuming the company pays no dividends, what is the implied return on the company's stock over the next year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Current stock price b. Target stock price c. Implied return of stock %
Arrington stock is currently valued at $28.40 per share. The firm had eamings per share of $1.86 last year and projects earnings of $2.09 per share for next year. What is the trailing twelve month price-earnings ratio?
Financial accounting
Here are alphas and betas for Company X and Company Y for the 60 months ending April 2019. Alpha is expressed as a percent per month. A month later, the market is up by 5%, X is up by 6% and Y is up by 3%. (3a) What is the abnormal rate of return for X and Y? ] Alpha Beta X 0.57 1.08 Y 0.46 0.65 The table below shows a condensed income statement and balance sheet for a plant. Income Statement Assets at 31 December 2018 Revenue 56.66 Net working capital 7.08 Raw materials cost 18.72 Operating cost 21.09 Depreciation Investment plant & equipment 69.33 4.50 Less accumulated depreciation Net plant & equipment 21.01 Pretax income 12.35 48.32 Tax at 35% 4.32 Net income 8.03 Total assets 55.40 (3b) Calculate the plant's EVA. Assume the cost of capital is 9%. (3c) Assume now that the plant could be sold to another company for $95 million. How should this fact change your calculation of EVA? Explain your answer
Currently, a firm has an EPS of $3.75 and a benchmark PE of 16.61. Earnings are expected to grow by 3.8 percent annually. What is the estimated current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Assume now that CAPM holds. You need to estimate the price of one stock of company XYZ. You expect that this company’s earnings per share will be $4 in one year, your estimation of Present Value of Growth Opportunities today is $40. The company has just paid out the dividend for the previous financial year. Expected return of market portfolio is equal to 20%, its standard deviation is equal to 55% and covariance between the returns on XYZ and market portfolio is 0.5. The risk-free rate is 5%. Find the price of a stock.
A firm is expected to pay a dividend of $2.85 next year and $3.15 the following year. Financial analysts believe the stock will be at their price target of $110 in two years.Compute the value of this stock with a required return of 13.1 percen

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