A start up technology company has projected earnings per share of $4.50. If the average technology industry

Fantastic news! We've Found the answer you've been seeking!

Question:

A start up technology company has projected earnings per share of $4.50. If the average technology industry P/E ratio is 30.

A. what would the company's projected stock price be?

B. What is the implicit required rate of return if dividends are expected to grow at 5% annual rate?

Related Book For answer-question

Intermediate Accounting Volume 2

ISBN: 9781260881240

8th Edition

Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel

See More Books

Posted Date: May 11, 2023 03:54 AM

See More Questions

Instructions: Enter all answers directly in this worksheet. When finished select Save As, and save this document using your last name and student ID as the file name. Upload the data sheet to...
The Cremmins Coat Company has recently completed a period of extraordinary growth, due to the popularity of its yellow jackets. Earnings per share have grown at an average compound annual rate of 15...
How does HCA's financial strategy affect its product-market strategy? How important is finance to HCA and in what ways? (Please no plagiarism) Hospital Corporation of America (A) In January of 1982...
For Problem 511, complete the design of a pair of helical gears to operate under the stated conditions. Specify the geometry of the gears and the material and its heat treatment. Assume that the...
At a beach the light is generally partially polarized due to reflections off sand and water. At a particular beach on a particular day near sundown, the horizontal component of the electric field...
Which one of the following expressions represents the first law of thermodynamics? (a) $q=\Delta E+W$ (b) $\Delta H=q-W$ (c) $\Delta H=q+W$ (d) $\Delta E=H-P \Delta V$.
Ann Duxbury started her practice as a design consultant on March 1, 2010. During the first month of operations, the business completed the following transactions: Requirements 1. Open the following...
Fast Yeti Custom Tees, launched by entrepreneurs Reid Lyle, Jordan Roudenis, and Ryan Montgomery, produces apparel products. The company has a diverse product line of T-shirts, hats, and polo shirts....
As stated in a class handout on the strategy of competition and cooperation that is posted in Module 9: "Economists have a simple view of cooperation and conflict: People tend to cooperate when they...
Ryan Ross (111-11-1112), Oscar Omega (222-22-2222), Clark Carey (333-33-3333), and Kim Kardigan (444-44-4444) are equal active members in ROCK the Ages LLC. ROCK serves as agent and manager for...
consider this company: Amazon . Compare Amazon's domestic environment in the U.S. versus its global environment of the European Union (EU). What are the barriers Amazon has been encountering in the...
Explain in detail and how to complete it and what answers Q4 Explain who needs disablity insurance in at least 2 Explain why a person would need disablity insuranc ein at least 2 sentances. Explain...
Problem (4): Use the information below to compute the probability of completing the project before 70 days. Activity Pred. a (opt) b (pes) 10 8 8 28 24 13 28 14 17 8 45 A BCDEFGH - Y J K None None...
Discuss how the five forces model can be used to analyze the pharmaceutical industry and determine the best strategies for success.
Parents wished to purchase a home that was to become the subject of the instant litigation. Defendant's parents were fully able to purchase the home through conventional financing. Defendant, a...
Discuss the various employment-at-will exceptions and explain how they protect employees from termination.
Financial literacy is one of the most important factors determining success in both personal development and business. Ensuring financial stability for yourself and ur family depends on whether you...
1. Which of the four major types of information systems do you think is the most valuable to an organization? 2. How do you critically associate the ideas of business agility and business efficiency...
Harrison Ltd. issued $4,000,000 of bonds payable on 30 April 20X0. The bonds are due on 30 April 20X8, and bear interest at 4.5% per annum, payable every 30 October and 30 April. The bonds were...
Selected accounts from the SFP of SMI Ltd. at 31 December 20X8 and 20X7 are provided below: Required: Calculate the current ratio and quick ratio for SMI for 20X8 and 20X7. Comment on what the ratios...
Closed Tech Ltd. issued convertible bonds on 1 July 20X8. The 15-year, 5% $10,000,000 bonds pay interest semi-annually each 30 June and 31 December. At the investors option, each $1,000 bond is...
W.E. Jolson, CPA, has issued the following report on the Bambino Lumber Company's balance sheet: I have audited the balance sheet of Bambino Lumber Co. for the period ended December 31, 19X1. Due to...
You have been asked to prepare unaudited financial statements for the Marek Company for the year ended December 31, 19X5. Marek does not want the notes to financial statements to disclose that the...
You have prepared tax returns for the Hicks & Hocks Corporation for several years. Hicks called you and requested 50 additional copies of the return this year. You have never prepared audited or...

A start up technology company has projected earnings per share of $4.50. If the average technology industry

Question:

Expert Answer:

A To calculate the projected stock price of the technology company we can use the PE ratio formula P... View the full answer

Intermediate Accounting Volume 2

Students also viewed these finance questions