Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Alan and bros Corporation recently reported net income of $8 million. It has 540,000 shares of common stock, which currently trades at $21 a share.

Alan and bros Corporation recently reported net income of $8 million. It has 540,000 shares of common stock, which currently trades at $21 a share. They continue to expand and anticipate that 1 year from now its net income will be $13.2 million. Over the next year, it also anticipates issuing an additional 81,000 shares of stock so that 1 year from now it will have 621,000 shares of common stock. Assuming their price/earnings ratio remains at its current level, what will be its stock price 1 year from now?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Economics

Authors: Zvi Bodie, Robert C Merton, David Cleeton

2nd Edition

0558785751, 9780558785758

More Books

Students also viewed these Finance questions

Question

What restrictions are placed on the rehabilitation tax credit?

Answered: 1 week ago

Question

=+6. Did your solution clearly highlight the main consumer benefit?

Answered: 1 week ago