Question: The same info as in previous question: For the coming year, ABC Corp. expects to report earnings per share of $4 (unchanged from last year)

The same info as in previous question: For the coming year, ABC Corp. expects to report earnings per share of $4 (unchanged from last year) and a cash dividend per share of $1. It is also expected that they will be able to maintain the same dividend payout ratio and earn a rate of return on equity of 10% for the foreseeable future. We also know that companies comparable to ABC currently sell at a P/E multiple of 15 times. Using the comparables P/E ratio, what is your price estimate for ABC's stock?

1. $15

2. $60

3. None of the other answers

4. $15

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