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 | $ 90.25 | $ 105.71 | $ 127.73 | $ 139.12 |
Low price | 71.37 | 86.63 | 75.75 | 114.50 |
EPS | 6.62 | 9.04 | 8.70 | 10.29 |
Earnings are expected to grow at 8 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.
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