In the previous problem, we assumed that the stock had a single stock price for the year. However, 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: 

Earnings are projected to grow at 9 percent over the next year. What are your high and low target stock prices over the next year?

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Year 2 $26.32 20.18 1.58 Year 4 $37.01 26.41 Year Year 3 $30.42 High price Low price EPS $27.43 1 19.86 25.65 1.35 1.51 1.85