In Problem 21, suppose the dividends per share over the same period were $1.00, $1.08, $1.17, $1.25, $1.35, and $1.40, respectively. Compute the expected share price at the end of 2017 using the perpetual growth method. Assume the market risk premium is 7.5 percent, Treasury bills yield 3 percent, and the projected beta of the firm is 1.10.

Data From Problem 21

Given the information below for Seger Corporation, compute the expected share price at the end of 2017 using price ratio analysis. Assume that the historical average growth rates will remain the same for 2017.

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Year 2013 2015 2011 2012 2014 2016 $121.50 Price $94.50 $100.40 $99.10 $97.90 $136.80 EPS 4.34 6.06 5.05 5.22 7.00 8.00 CFPS 8.24 7.27 10.12 13.10 8.71 11.80 58.52 60.69 SPS 71.60 52.60 78.70 57.90