Question: Suppose that a security earned $4.28 per share for the year and has a price of $75 per share. Earnings are expected to grow at

Suppose that a security earned $4.28 per share for the year

Suppose that a security earned $4.28 per share for the year and has a price of $75 per share. Earnings are expected to grow at 0.12% annually for the next five years. Also suppose the PE multiple is expected to increase 0.1% betweer now and five years. What is the expected price in five years? The expected price in 5 years is $ Round your answer to the nearest two decimal places

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Suppose that a security earned $4 per share for the year and has a price of $100 per share. Earnings are expected to grow at 0.12 % annually for the next five years. Also suppose the PE multiple is...

Problem 11-15 - PE Model Suppose that a security earned $4.53 per share for the year and has a price of $85 per share. Earnings are expected to grow at 0.12 % annually for the next five years. Also...

Topstone Industries is expected to pay a dividend of $3.25 per share in one year. This dividend, along with the firm's earnings, is expected to grow at a rate of 6% forever. If the current market...

7B help me undserstand numbers 1-5 with steps included so i can learn and understand the questions 1) 2) 3) 1-3 parts (a-c questions are listed) 4) a-c questions and table listed 5) Common stock...

6. (15 points) You are thinking of investing in three stocks: X, Y and Z. Each stock is expected to pay a dividend of $9 per share in one year (t=1). The dividend for each stock is then expected to...

a) Nura, a new executive at Sky Investments, is required to perform simple analysis of bonds in the bond market. She wants to calculate the theoretical values of the following four (4) bonds. Using...

Answer Without Excel No calculator Show all work You are thinking of investing in three stocks: X, Y and Z. Each stock is expected to pay a dividend of $9 per share in one year (t=1). The dividend...

Newman Manufacturing is considering a cash purchase of the stock of Grips Tool. During the year just completed, Grips earned $4.25 per share and paid cash dividends of $2.55 per share (D0=2.55)....

ExxonMobil 20- year bonds pay 6 percent interest annually on a $ 1,000 par value. If bonds sell at $ 945, what is the bonds expected rate of return?

XXX Corporation acquired 80% of the outstanding shares of United Company on June 1, 2020 for P3,517,500. United Companys stockholders equity components at the end of this year as follows: Ordinary...

A primary advantage of an open-loop control system is the ability to reduce the systems sensitivity. True or False

On 1 March 2007 DB Limited issued R560 000 15% debentures at R98. The debentures were to be redeemed at par in four equal annual payments starting 28 February 2010. Required: Journalise the above...