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boyakko [2]
2 years ago
11

Cold Goose Metal Works Inc. just reported earnings after tax (also called net income) of $95,000,000, and a current stock price

of $14.75 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 2,800,000 new shares of stock (raising its shares outstanding from 5,500,000 to 8,300,000). If Cold Goose’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? (Note: Round intermediate calculations to four decimal places. Round the expected stock price to two decimal places.)
Business
1 answer:
aivan3 [116]2 years ago
6 0

Answer:

$12.22 per share

Explanation:

The computation of the stock price one year from now is shown below;

Current EPS = Net Income ÷ Number of shares

= $95,000,000/5,500,000

= $17.2727

Now  

P/E Ratio = Market Price per share ÷ Earnings per share

= $14.75 ÷ 17.2727

= 0.8539 times

Now

Revised EPS = $95,000,000 × 1.25 ÷ 8,300,000

= $14.3072  

So, the Price is

= 14.3072 × 0.8539

= $12.22 per share

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Answer:

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Explanation:

Following the Accrual accounting - an accounting method that revenue or expenses are recorded when a transaction occurs rather than when payment is received or made. On November 1, 2018, Cullumber Farm had to pay $162,000 in advance to John Deere. John Deere recorded the cash receiving by the entry:

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What is the gain or loss from purchasing a put option on $100,000 face value Treasury bonds with a strike price of $90,000 (90 p
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Answer:

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7 0
2 years ago
Ford Motor Company has issued 8% convertible debentures, convertible at a 10:1 ratio. Currently the debenture is trading at 94.
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