Question: Question 6: Prospective Analysis (6 marks) You are given the earnings per share (EPS) for XYZ Company for the followings years as follows: Yewr andel

Question 6: Prospective Analysis (6 marks) You are given the earnings

Question 6: Prospective Analysis (6 marks) You are given the earnings per share (EPS) for XYZ Company for the followings years as follows: Yewr andel Dev 201) 2012 20132014 2015 EPS 2 13.6145 48152 14.5 14.8 15.2 a. Explain what is the random walk behavior of earning. (2 marks) b. What would the forecast for earnings per share in forecasted year 2016 under the random walk model? (2 marks) c. If actual earnings per share for XYZ Company in forecasted year 2016 were $16, given this information, what would be the forecasted year 2017 earnings per share? (2 marks) Question 6: Prospective Analysis (6 marks) You are given the earnings per share (EPS) for XYZ Company for the followings years as follows: Yewr andel Dev 201) 2012 20132014 2015 EPS 2 13.6145 48152 14.5 14.8 15.2 a. Explain what is the random walk behavior of earning. (2 marks) b. What would the forecast for earnings per share in forecasted year 2016 under the random walk model? (2 marks) c. If actual earnings per share for XYZ Company in forecasted year 2016 were $16, given this information, what would be the forecasted year 2017 earnings per share? (2 marks)

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