Last year, Rec Room Sports reported earnings per share of $8.50 when its stock price was $212.50.This year, its earnings increased by 20 percent. If the P/E ratio remains constant, what is likely tobe the price of the stock? Explain

Last year, Rec Room Sports reported earnings per share of $8.50 when its stock price was $212.50.This year, its earnings increased by 20 percent. If the P/E ratio remains constant, what is likely tobe the price of the stock? Explain

Name: Last year, Rec Room Sports reported earnings per share of $8.50 when i
Uploaded: 2024-03-20T06:51:32.000Z
Channel: Bartleby
Description: Last year, Rec Room Sports reported earnings per share of $8.50 when its stock price was $212.50.This year, its earnings increased by 20 percent. If the P/E ratio remains constant, what is likely tobe the price of the stock? Explain

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

See similar textbooks

Similar questions

Last year, Rec Room Sports reported earnings per share of $7.80 when its stock price was $140.40. This year. its earnings increased by 25 percent. If the P/E ratio remains constant, what is likely to be the price of the Stock? (Round your answer to 2 declmal places.) Pice bf thssoce
Last year, Big W Company reported earnings per share of $2.50 when its stock was selling for$50.00. If its earnings this year increase by 10 percent and the P/E ratio remains constant, whatwill be the price of its stock? Explain.
Last year, Big W Company reported earnings per share of $3.50 when its stock was selling for $87.50. If its earnings this year increase by 10 percent and the P/E ratio remains constant, what will be the price of its stock? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Stock Price
Zzz corps stock price at the end of last year was 22.45 and its earnings per share for the year were $ 1.75 . What was its P / E ratio ? a . 15.34 B. 16.35 c . 21.95 D 12.83 e . 18.48
If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company over the past four years: Year 1 Year 2 Year 3 Year 4 High price $ 99.70 $ 123.30 $ 132.70 $ 149.33 Low price 74.53 90.64 71.32 117.85 EPS 8.98 10.73 11.81 13.20 Earnings are projected to grow at 9 percent over the next year. a. What is your high target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is your low target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company: Year 1 Year 2 Year 3 Year 4 High $87.93 $100.35 $121.89 $133.60 Low price 69.85 83.19 79.99 110.18 EPS 6.54 8.96 8.62 10.21 Earnings are expected to grow at 5.5 percent over the next year. a. What is the high target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the low target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. High target price b. Low target price price
A stock has earned $3.54 per share before dividends. They have a DPR of 35%. Similar stocks have P/E ratios of 15.3. What is your expected price target if the company earns $3.97 per share next year?
Apple Inc. (AAPL) is expected to pay a dividend of $1.59 at the end of the year. AAPL’s dividend payout ratio and return on equity (ROE) are 41.27% and 6.86%, respectively. Other things held constant, what would AAPL’s stock price be if the required rate of return is 6.47%? A. $93.14 B. $84.97 C. $72.26 D. $65.13
Ta
A company expects EPS to be $2.52 next year. The industry average P/E ratio is 23.99 and Enterprise multiple is 7.57. The EBITDA for the company is $22.97 million. What is an estimate of the stock price using the method of comparables for P/E multiples? Round your answer to two (2) decimal places.
If Target Corp. (TGT) recently earned a profit of $6.07 earnings per share and has a P/E ratio of 16.5. The dividend has been growing at a 10 percent rate over the past few years. If this growth continues, what would be the stock price in five years if the P/E ratio remained unchanged?
Rand Corp's stock price at the end of last year was $40.00, and its book value per share was $24.50. What was its Market/Book ratio?