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maxonik [38]
2 years ago
7

If Cute Camel’s forecast turns out to be correct and its price/earnings (P/E) ratio does not change, what does the company’s man

agement expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places.)
Business
1 answer:
Llana [10]2 years ago
5 0

Cute Camel Woodcraft Company Just reported earnings after tax (also called net income) of $9, 750,000, and a current stock price of $36.75 per share. The company Is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 2, 900,000 new shares of stock (raising its shares outstanding from 5, 500,000 to 8, 400,000). If Cute Camel's forecast turns out to be correct and its price-to-earnings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places.)

Answer:

The scenario says that

Previous P/E ratio = New P/E ratio after issuance of ordinary shares and increase in earnings after tax

So we have to only find previous data before any changes to find previous P/E ratio which is equal to new P/E ratio. This means it could be used to find new share price which has changed due to increase earnings and ordinary shares.

Previous P/E ratio =  ($36.75 per share * 5,500,000 shares)/$9,750,000

= $20.7308 per share

New P/E Ratio = Market Value of total ordinary shares / Total Earnings

Previous (P/E) = Share price * Total ordinary shares / prev. ear. * 125%

This implies

Share price = Previous (P/E) * Previous earnings * 125% / Total ordinary shares

Share price = $20.7308 / share * $9,750,000 *125% / $8,400,000

Share price = $30.0781 per share.

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pochemuha

Answer: developing a written report to summarize the results of the period's marketing activities.

Explanation:

The last step in the marketing process often is developing a written report to summarize the results of the period's marketing activities.

Developing a written report to summarise the results of the marketing activities is necessary in order to evaluate the performance of the marketing activity and also learn from past mistakes which have previously affected the company.

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The kind of motivation at play based on the consumer’s behavior in the given scenario is <u>irrational motive</u>

There are two kinds of motives in consumer behavior which includes:

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Based on the given scenario, we are told that Lila is going to purchase a couch and she goes to the store to get one. When she gets there, she notes a comfortable cushion, but makes the decision to get a less comfortable for "reasons she cannot explain". This is an example of Irrational (emotional) motive

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Answer:

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But the government grants are reduced from the cost of the the project. It is not recorded as other financing sources.

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Use of general fund in these capital projects will account for such other financing sources.

Cash received from issue of bonds for this project will also account for such capital fund.

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