| Abbott Laboratories (ABT) engages in the discovery, development, manufacture, and sale of a line of health care and pharmaceutical products. Below you will find selected information from Value Line. Use the Value Line estimated 2012 figures as the actual year-end figures for the company. The beta reported was .8 and the risk-free rate was 3.91 percent. Assume a market risk premium of 7 percent. |
| The high and low share price each year were: |
| | | 2008 | | 2009 | | 2010 | | 2011 | | 2012 |
| High | $ | 80 | $ | 67.9 | $ | 61.3 | $ | 68.3 | $ | 57.4 |
| Low | | 70 | | 59.5 | | 39.8 | | 45.8 | | 41.7 |
| |
| Using the P/E, P/CF, and P/S ratios, estimate the 2013 share price for Abbott Laboratories. Use the average stock price each year to calculate the price ratios. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.) |
| Price ratio | |
| P/E | $ |
| P/CF | $ |
| P/S | $ |
| |
Abbott Laboratories (ABT) engages in the discovery, develop sale of a line of health care and pharmaceutical products. Bel information from Value Line. Use the Value Line estimated 20 year-end figures for the company. The beta reported was 8 a 3.91 percent. Assume a market risk premium of 7 percent. 204 es 2008 2009 2010 2011 2012 2013 VALUE LINE PUB. LLC 15-17 19.40 19.82 22.73 24.74 2565 21.05 Sales per sh 30.05 432 509 590 6.61 6.60 7.30 "Cash Flow' per sh 8.50 303 372 4.17 456 5.00 5.35 Earnings per sh 6.50 1.44 160 1.78 1.88 2.16 Divds Decl'd per she 2.40 85 .70 68 36 .85 .75 Cap'l Spending per sh .90 11.48 14.73 14.47 15.56 17.05 18.25 Book Value per shC 22.25 152241551.91570 15702 1570.01560.0 Common Shs Outstg 7550.0 18.3 13.0 122 122 Bold figures are Avg Ann' P E Ratio 15.0 1.10 .87 .78 .79 Value Line Relative PE Ratio 1.00 26% 33% cates 35% 35% Avg Ann'l Div'd Yield 26% 29528 3076535167 38861 4025042850 Sales (Smill 51200 25.5% 288% 303% 31.24 318% 31.5% Operating Margin 31.0% 18388 20893 25243 3043 9 3100 3050 Depreciation (Smil) 3150 473425805 25501173310 7880 8350 Net Profit Smill 10050 192% 170% 150% 15.0% 15.5% 16.0% Income Tax Rate 17.0% 16.0% 18.9% 18.5% 18.0% 19.6% 19.5% Proft Margin 19.6% 5450.7102615055.18288.5 7800 7900 Working Cap' (Smil) 9500 8713.3 11286 12524 12010 11500 10800 Long-Term Debt Smilh 9000 17480 22858 22388 24440 26750 20500 Shr. Equity Smill) 34500 18.8% 17,5% 19.1% 20.5% 19.0% 19.5% Return on Total Cap' 20.0% 27.1% 254% 290% 30.09 29.5 29.5% Return on Sht. Equity 29.0% 14.6% 14.8% 17.1% 18.0% 17% 18.0% Retained to Com Eq 18.0% 41% 40% 40% 38% All Div ds to Net Prof 37% The high and low share price each year were: High Low 2008 2009 2010 $ 80 $ 67.9 $ 61.3 70 59.5 39.8 2011 2012 $68.3 $ 57.4 45.8 41.7 Abbott Laboratories (ABT) engages in the discovery, di sale of a line of health care and pharmaceutical produc information from Value Line. Use the Value Line estima year-end figures for the company. The beta reported wa 3.91 percent. Assume a market risk premium of 7 percent 303 15.0 18.3 2008 2009 2010 2011 2012 2013 VALUE LINE PUB. LLC 15-17 19.40 33.05 19.82 22.73 24.74 25.65 21.05 Sales per sh 432 5.09 8.50 590 6.61 6.60 7.30 "Cash Flow" per sh 3.72 4.17 466 5.00 6.50 5.35 Earnings per sh 144 160 1.78 1.88 2.40 204 2.16 Div'ds Decl'd per she 85 .70 68 .35 .85 .75 Cap'l Spending per sh 11.48 14.73 14.47 15.56 17.05 18.25 Book Value per shC 22.25 152271551.91547.0 1570.41570.0 1560.0 (Common Shs Outstg 7550.0 13.0 122 122 Bold figures are Avg Ann'I PE Ratio 1.10 .87 .78 .79 Value Line Relative PE Ratio 1.00 emates 26% 33% 35% 3.5% Avg Ann'l Div'd Yield 26% 295283076535167 38851 4025042850 Sales (Smil) 51200 25.5% 288% 303% 31.2% 31.8% 31.5% Operating Margin 31.0% 18388 2089326243 30439 3100 3050 Depreciation (Smil) 3150 4734258052650117331.0 7880 8350 Net Profit (Smill) 10050 192% 170% 150% | 15.0% 15.5% | 16.0% Income Tax Rate 17.0% 16.0% 18.9% 18.5% 18.9% 19.6% 19.5% Profit Margin 19.6% 5450.7102615055.18288.5 7800 7900 Working Cap'l (Smill) 9500 8713.3 1128612524 12010 11500 10800 Long-Term Debt ($mill) 9000 17480 22858 22388 24440 26750 28500 Shr. Equity Smill) 34500 18.8% 17.5% 19.1% 20.5% 19.0% 19.5% Return on Total Cap'l 23.0% 27.1% 254% 290% 300% 29.5% 29.5% Return on Sht. Equity 29.0% 14 0% 14.8% 17.1% 18.0% 17.5% 18.0% Retained to Com Eq 18.0% 46% 41% 40% 38% All Div ds to Net Prof 37% Abbott Laboratories (ABT) engages in the discovery, develop sale of a line of health care and pharmaceutical products. Bel information from Value Line. Use the Value Line estimated 20 year-end figures for the company. The beta reported was 8 a 3.91 percent. Assume a market risk premium of 7 percent. 204 es 2008 2009 2010 2011 2012 2013 VALUE LINE PUB. LLC 15-17 19.40 19.82 22.73 24.74 2565 21.05 Sales per sh 30.05 432 509 590 6.61 6.60 7.30 "Cash Flow' per sh 8.50 303 372 4.17 456 5.00 5.35 Earnings per sh 6.50 1.44 160 1.78 1.88 2.16 Divds Decl'd per she 2.40 85 .70 68 36 .85 .75 Cap'l Spending per sh .90 11.48 14.73 14.47 15.56 17.05 18.25 Book Value per shC 22.25 152241551.91570 15702 1570.01560.0 Common Shs Outstg 7550.0 18.3 13.0 122 122 Bold figures are Avg Ann' P E Ratio 15.0 1.10 .87 .78 .79 Value Line Relative PE Ratio 1.00 26% 33% cates 35% 35% Avg Ann'l Div'd Yield 26% 29528 3076535167 38861 4025042850 Sales (Smill 51200 25.5% 288% 303% 31.24 318% 31.5% Operating Margin 31.0% 18388 20893 25243 3043 9 3100 3050 Depreciation (Smil) 3150 473425805 25501173310 7880 8350 Net Profit Smill 10050 192% 170% 150% 15.0% 15.5% 16.0% Income Tax Rate 17.0% 16.0% 18.9% 18.5% 18.0% 19.6% 19.5% Proft Margin 19.6% 5450.7102615055.18288.5 7800 7900 Working Cap' (Smil) 9500 8713.3 11286 12524 12010 11500 10800 Long-Term Debt Smilh 9000 17480 22858 22388 24440 26750 20500 Shr. Equity Smill) 34500 18.8% 17,5% 19.1% 20.5% 19.0% 19.5% Return on Total Cap' 20.0% 27.1% 254% 290% 30.09 29.5 29.5% Return on Sht. Equity 29.0% 14.6% 14.8% 17.1% 18.0% 17% 18.0% Retained to Com Eq 18.0% 41% 40% 40% 38% All Div ds to Net Prof 37% The high and low share price each year were: High Low 2008 2009 2010 $ 80 $ 67.9 $ 61.3 70 59.5 39.8 2011 2012 $68.3 $ 57.4 45.8 41.7 Abbott Laboratories (ABT) engages in the discovery, di sale of a line of health care and pharmaceutical produc information from Value Line. Use the Value Line estima year-end figures for the company. The beta reported wa 3.91 percent. Assume a market risk premium of 7 percent 303 15.0 18.3 2008 2009 2010 2011 2012 2013 VALUE LINE PUB. LLC 15-17 19.40 33.05 19.82 22.73 24.74 25.65 21.05 Sales per sh 432 5.09 8.50 590 6.61 6.60 7.30 "Cash Flow" per sh 3.72 4.17 466 5.00 6.50 5.35 Earnings per sh 144 160 1.78 1.88 2.40 204 2.16 Div'ds Decl'd per she 85 .70 68 .35 .85 .75 Cap'l Spending per sh 11.48 14.73 14.47 15.56 17.05 18.25 Book Value per shC 22.25 152271551.91547.0 1570.41570.0 1560.0 (Common Shs Outstg 7550.0 13.0 122 122 Bold figures are Avg Ann'I PE Ratio 1.10 .87 .78 .79 Value Line Relative PE Ratio 1.00 emates 26% 33% 35% 3.5% Avg Ann'l Div'd Yield 26% 295283076535167 38851 4025042850 Sales (Smil) 51200 25.5% 288% 303% 31.2% 31.8% 31.5% Operating Margin 31.0% 18388 2089326243 30439 3100 3050 Depreciation (Smil) 3150 4734258052650117331.0 7880 8350 Net Profit (Smill) 10050 192% 170% 150% | 15.0% 15.5% | 16.0% Income Tax Rate 17.0% 16.0% 18.9% 18.5% 18.9% 19.6% 19.5% Profit Margin 19.6% 5450.7102615055.18288.5 7800 7900 Working Cap'l (Smill) 9500 8713.3 1128612524 12010 11500 10800 Long-Term Debt ($mill) 9000 17480 22858 22388 24440 26750 28500 Shr. Equity Smill) 34500 18.8% 17.5% 19.1% 20.5% 19.0% 19.5% Return on Total Cap'l 23.0% 27.1% 254% 290% 300% 29.5% 29.5% Return on Sht. Equity 29.0% 14 0% 14.8% 17.1% 18.0% 17.5% 18.0% Retained to Com Eq 18.0% 46% 41% 40% 38% All Div ds to Net Prof 37%
