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Last year, Rec Room Sports reported earnings per share of $8.00 when its stock price was $160.00. This year, its earnings increased by 20 percent. If the P/E ratio remains constant, what is likely to be the price of the stock?

Last year, Rec Room Sports reported earnings per share of $8.00 when its stock price was $160.00. This year, its earnings increased by 20 percent. If the P/E ratio remains constant, what is likely to be the price of the stock?

Managerial Accounting
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
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Last year, Rec Room Sports reported earnings per share of $8.00 when its stock price was $160.00. This year, its earnings increased by 20 percent. If the P/E ratio remains constant, what is likely to be the price of the stock?
Transcribed Image Text:Last year, Rec Room Sports reported earnings per share of $8.00 when its stock price was $160.00. This year, its earnings increased by 20 percent. If the P/E ratio remains constant, what is likely to be the price of the stock?
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