Please answer the following questions in Excel:

- Sully Corp. currently has earnings per share (EPS) of $2.53, and the benchmark PE multiple for appropriately-chosen comps is 19. Analysts expect Sullys EPS to grow by 6 percent in the coming year.

a) What is your estimate of the current value of each share of Sullys stock?

b) Assuming no multiple expansion (i.e., the benchmark multiple stays constant), what should the analysts target stock price be for one year from now?

c) Assuming that Sully does not pay a dividend, what is the rate of return on Sullys stock that is implied by the estimates in the two questions above? What does this tell you about the relation between stock returns and EPS growth in multiples valuation models?