Domergue Corp. currently has an EPS of $3.76, and the benchmark PE for the company is 21.

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Domergue Corp. currently has an EPS of $3.76, and the benchmark PE for the company is 21. Earnings are expected to grow at 5.1 percent per year.

a. What is your estimate of the current stock price?

b. What is the target stock price in one year?

c. Assuming the company pays no dividends, what is the implied return on the company’s stock over the next year?What does this tell you about the implicit stock return using PE valuation?

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Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-1260153590

12th edition

Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan

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Question Posted: Jul 17, 2019 11:06 AM

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Domergue Corp. currently has an EPS of $3.76, and the benchmark PE for the company is 21.

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a Using the equation to calculate the price of a share of stock with the PE ...View the full answer

Fundamentals of Corporate Finance

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