An investor estimates that next year's sales for Dursley's Hotels, Inc., should amount to about

$103

million. The company has

2.6

million shares outstanding, generates a net profit margin of about

8.5%,

and has a payout ratio of

52%.

All figures are expected to hold for next year. Given this information, compute the following.

a. Estimated net earnings for next year.

b. Next year's dividends per share.

Note:

EPS is an intermediate computation not required as an input below. However, round your computation of EPS to at least two decimal places.c. The expected price of the stock (assuming the P/E ratio is

23.2

times earnings).d. The expected holding period return (latest stock price:

$59.33

per share).

Note:

The dividend will be paid during the holding period.

Note:

The dividend will be paid during the holding period.

Question content area bottom

Part 1

a. The

estimated

net earnings for next year is

$enter your response here

million.(Round to three decimal places.)

Part 2

b. The dividends per share for next year is

$enter your response here.

(Round to the nearest cent.)

Part 3

c. Assuming the P/E ratio is

23.2

times earnings,

the

expected price of the stock is

$enter your response here.

(Round to the nearest cent.)

Part 4

d. The expected holding period return is

enter your response here%.

(Round to two decimal places.)

An investor estimates that next year's sales for Dursley's Hotels, Inc., should amount to about $103 million. The company has 2.6 million shares outstanding, generates a net profit margin of about 8.5%, and has a payout ratio of 52%. All figures are expected to hold for next year. Given this information, compute the following. a. Estimated net earnings for next year. b. Next year's dividends per share. Note: EPS is an intermediate computation not required as an input below. However, round your computation of EPS to at least two decimal places. c. The expected price of the stock (assuming the P/E ratio is 23.2 times earnings). d. The expected holding period return (latest stock price: $59.33 per share). Note: The dividend will be paid during the holding period. Note: The dividend will be paid during the holding period. a. The estimated net earnings for next year is $ million. (Round to three decimal places.) b. The dividends per share for next year is $ (Round to the nearest cent.) c. Assuming the P/E ratio is 23.2 times earnings, the expected price of the stock is $ (Round to the nearest cent.) d. The expected holding period return is \%. (Round to two decimal places.)