fin 305

chapter 8 question 5

New York Times Co. (NYT) recently earned a profit of $2.51 per share and has a P/E ratio of 19.85. The dividend has been growing at a 9.75 percent rate over the past six years.

If this growth rate continues, what would be the stock price in five years if the P/E ratio remained unchanged? What would the price be if the P/E ratio increased to 25 in five years? (Round your answers to 2 decimal places.)

Stock price	$
Stock price with new P/E	$