You have found the following historical information for DEF Company:Year 2Year 3Year 4Year1Stock Price$45.38$54.31$59.3$50.08EPS$2.37$2.4$3$3.48Earnings are expected to grow at 8 percent for the next year. Using the company's historical averagePE as a benchmark, what is the target stock price in one year? Answer to two decimals.

First, PE ratio for each year is calculated as Price divided by earnings. Then the average of 4 year…

Answered: You have found the following historical…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

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The following table lists the closing levels of the S&P 500 Index and the share price of Amazon stock. Year 2017 2018 2019 2020 2021 Relative Return S&P 500 Index 2043.94 % 2238.83 2673.61 2506.85 3230.78 AMZNt AMZNt-1 What was the lowest annual return to two decimal points. The annual return of AMZN relative to the S&P 500 Index can be expressed using the formula: AMZN S&P 500 t S&P 500 t-1 675.89 768.66 1169.47 1501.97 1847.84 AMZN relative to the S&P 500 Index from 2018 to 2021? Round your answer
The following table shows your stock positions at the beginning of the year, the dividends that each stock paid during the year, and the stock prices at the end of the year. Company US Bank PepsiCo 305 Uniphase Duke Energy Shares 400 300 700 300 Dollar return Percentage return Portfolio Return Beginning of Year Price $45.40 60.98 20.78 28.40 Dividend Per Share $2.25 1.54 What is your portfolio dollar return and percentage return? (Round your answers to 2 decimal places.) % 1.45 End of Year Price $45.33 64.45 18.56 34,16
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'S A company will pay a $2 per share dividend in 1 year. The dividend in 2 years will be $4 per share, and it is expected that dividends will grow at 5% per year thereafter. The expected rate of return on the stock is 14%. a. What is the current price of the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current price b. What is the expected price of the stock in a year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Expected price
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Sunset Corporation currently has an EPS of $2.38, and the benchmark PE for the company is 17. Earnings are expected to grow at 7.5 percent per year. a. What is your estimate of the current stock price? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the target stock price in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. Assuming the company pays no dividends, what is the implied return on the company's stock over the next year? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.2. a. Stock price today b. Stock price in one year c. Implied return

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