In the previous problem, we assumed that the stock had a single stock price for the year.
Question:
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:
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Input Area Year 1 Year 2 Year 3 Year 4 High stock price 9790 12150 13090 14753 Low s...View the full answer
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Related Book For
Fundamentals of corporate finance
ISBN: 978-0078034633
10th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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