LO1 28. Stock Valuation and PE In the previous problem, we assumed that the stock had a single stock price for the year. However, 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 Low price EPS $48.60 37.25 2.02 $57.34 42.18 2.31 $69.46 55.85 2.45 $74.85 63.18 3.05 LO1 28. Stock Valuation and PE In the previous problem, we assumed that the stock had a single stock price for the year. However, 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 Low price EPS $48.60 37.25 2.02 $57.34 42.18 2.31 $69.46 55.85 2.45 $74.85 63.18 3.05