Question
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
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 | Year 3 | Year 4 | |
---|---|---|---|---|
High price | $ 88.51 | $ 101.69 | $ 123.35 | $ 134.98 |
Low price | 70.23 | 84.05 | 78.93 | 111.26 |
EPS | 6.56 | 8.98 | 8.64 | 10.23 |
Earnings are expected to grow at 6.5 percent over the next year.
What is the high target stock price over the next year?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
What is the low target stock price over the next year?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
$144.14 & $118.64 ARE INCORRECT
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