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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 single

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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 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 $85.90 $95.66 $116.78 $128.77 High price Low price EPS 68.52 6.47 80.18 8.89 83.70 8.55 106.40 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? (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? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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