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If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a
If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company: Year 1 Year 2 High price $87.93 $100.35 Year 3 $121.89 Year 4 $133.60 Low price 69.85 8339 EPS 6.54 8.96 79.99 8.62 110.18 10.21 Earnings are projected to grow at 5.5 percent over the next year. What are the high and low PE ratios for each year? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
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