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: High price Low price EPS Year 1 $ 85.90 68.52 6.47 Year 2 $ 95.66 80.18 8.89 a. High target price b. Low target price Year 3 $ 116.78 83.70 8.55 Year 4 $ 128.77 106.40 10.14 Earnings are expected to grow at 6 percent over the next year. a. 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. b. 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.

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: Earnings are expected to grow at 6 percent over the next year. a. 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. b. 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