What is the target stock price in one year

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Reference no: EM132980409

Problem - Firm A Currently has an EPS of 3.50, and the benchmark PE for this company is 20. Earnings are expected to grow at 12% per year.

Required -

a. What is your estimate of the current stock price?

b. What is the target stock price in one year?

c. Assuming the company pays no dividends, what is the implied return on the company's stock over the next year?

d. Elaborate the two factors that determine a company's PE ratio.

Reference no: EM132980409

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