Please provide the accurate answer to this financial accounting problem using valid techniques. Silverstone Technologies Inc. has a balance sheet equity of $8.5million. The income statement shows a net income of $1,120,000. Thecompany paid dividends of $600,000 and has 200,000 shares of stockoutstanding. The benchmark PE ratio is 25.What is the target stock price in one year?

Step 1: Definition of Target Stock PriceThe target stock price is an estimate of a stock's future…

Answered: Silverstone Technologies Inc. has a…

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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Silverstone Technologies Inc. has a balance sheet equity of $8.5 million. The income statement shows a net income of $1,120,000. The company paid dividends of $600,000 and has 200,000 shares of stock outstanding. The benchmark PE ratio is 25. What is the target stock price in one year?