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Kisachek [45]
3 years ago
14

Perine, Inc., has balance sheet equity of $6 million. At the same time, the income statement shows net income of $906,000. The c

ompany paid dividends of $480,180 and has 200,000 shares of stock outstanding. If the benchmark PE ratio is 24, what is the target stock price in one year? Assume the firm will grow at the sustainable growth rate. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Oksanka [162]3 years ago
5 0

Answer:

The target stock price in year 1 is $51.12

Explanation:

Given SE = $6 MIL, NI= $906 000, Div= $408180, Shares= 200000, PE ratio= 24 , SP =?

W e will use the price earning ratio as we are are given the benchmark PE ratio and this ratio measures the stock price relative to it profits

PE = Stock price / Earnings per share

Need to calculate Earnings per share

EPS = net Income - dividends/ oustanding Shares

       =906000-480180/200000

         =$2.1291/$2.13

Sustitute in the formula for PE ratio

24 = Stock Price/2.13

Stock Price = $51.12

Therefore the target stock price in year 1 is $51.12

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il63 [147K]

Answer:

Yes

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Kay [80]

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Making sure that your view points are clearly heard.

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Effective communication helps to improve productivity among employees in an organisation. This type of communication can be enhanced by a good body language.

In the scenario described above, an effective communication can be achieved by ensuring that your viewpoints are clearly understood by the audience.

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klasskru [66]

Answer:

The given above statement that advertising helps in developing and managing brand is true.

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