Refer to problem 15, and assume new circumstances cause the analysts to reduce the anticipated P/E in 2011 to 20 percent below the average low J&J P/E for the last 10 years. Furthermore, projected earnings per share are reduced to $4.00. What would the stock price be?
Answer to relevant QuestionsSecurity analysts following Health Sciences, Inc., use a simplified income statement method of forecasting. Assume that 2011 sales are $30 million and are expected to grow by 11 percent in 2012 and 2013. The after-tax profit ...If in problem 2 the beta (b) were 1.9 and the other values remained the same, what is the new value of Ke? What is the relationship between a higher beta and the required rate of return (Ke)? Why will the fixed-charge-coverage ratio always be equal to or less than times interest earned? Given the following financial data, compute: a. Return on equity. b. Quick ratio. c. Long-term debt to equity. d. Fixed-charge coverage. Assets: Cash $ 2,500 Accounts receivable 3,000 Inventory 6,500 Fixed ...Given the following financial data: Net income/Sales = 4 percent; Sales/Total assets = 3.5 times; Debt/Total assets = 60 percent; compute: a. Return on assets. b. Return on equity.
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