What is the target stock price in one year? Accounting Summit Systems, Inc. has balance sheet equity of $4.5 million. Theincome statement reports net income of $820,000. The companypaid dividends of $350,000 and has 140,000 shares of stockoutstanding. If the benchmark P/E ratio is 20, what is the targetstock price in one year?

To calculate the target stock price in one year, we need to use the Price-to-Earnings (P/E) ratio…

Answered: Summit Systems, Inc. has balance sheet…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 15P

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Summit Systems, Inc. has balance sheet equity of $4.5 million. The income statement reports net income of $820,000. The company paid dividends of $350,000 and has 140,000 shares of stock outstanding. If the benchmark P/E ratio is 20, what is the target stock price in one year?