Question
Assume that sales of Tasty AF Cake Co. have grown an average of 12% over the past five years. Current year sales are $21 million
Assume that sales of Tasty AF Cake Co. have grown an average of 12% over the past five years. Current year sales are $21 million and current net earnings are $7 million. Assume that sales will grow at the same rate as they have recently, and that the current net profit margin will stay the same in the future. There are currently 5 million shares outstanding, which you expect will stay the same moving forward. If you expect the P/E ratio at the end of next year to be 27, what stock price (per share) would you project for next year? Round you answer to the nearest cent, and enter your answer without the dollar sign.
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