FeatherSky Ltd. has a balance sheet equity of $7.1 million. At the same time, the income statement shows a net income of $1,120,000. The company has 175,000 shares of stock outstanding. If the benchmark PE ratio is 25, what is the target stock price in one year?

FeatherSky Ltd. has a balance sheet equity of $7.1 million. At the same time, the income statement shows a net income of $1,120,000. The company has 175,000 shares of stock outstanding. If the benchmark PE ratio is 25, what is the target stock price in one year?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 2P

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Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the market price per share for Rebert is 51.50. Required: 1. Compute the dollar amount of preferred dividends. 2. Compute the number of common shares. 3. Compute earnings per share. (Note: Round to two decimals.) 4. Compute the price-earnings ratio. (Note: Round to the nearest whole number.)
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