Cold Goose Metal Works, Inc. just reported earnings after tax (net income) of $8,500,000, and a current stock price of $25.75 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 2,000,000 new shares of stock (raising its shares outstanding from 5,500,000 to 7,500,000). If Cold Goose's forecast turns out to be correct and its price-to-earnings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places).
Cold Goose Metal Works, Inc. just reported earnings after tax (net income) of $8,500,000, and a current stock price of $25.75 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 2,000,000 new shares of stock (raising its shares outstanding from 5,500,000 to 7,500,000). If Cold Goose's forecast turns out to be correct and its price-to-earnings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places).
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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Cold Goose Metal Works, Inc. just reported earnings after tax (net income) of $8,500,000, and a current stock price of $25.75 per share. The company is If Cold Goose's forecast turns out to be correct and its price-to-earnings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places). |
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