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max2010maxim [7]
2 years ago
3

Perine, Inc., has balance sheet equity of $6.8 million. At the same time, the income statement shows net income of $815,000. The

company paid dividends of $285,000 and has 245,000 shares of stock outstanding. If the benchmark PE ratio is 16, what is the target stock price in one year
Business
1 answer:
NARA [144]2 years ago
3 0

Answer:

Share price = $53.22

Explanation:

The price of a share can determined using the price-earning ratio.

The ratio relates the price of a stock to its earning. A stock with a higher P/R indicates a high potential for growth.

Price of stock = Earnings per share (EPS) × comparative P/E ratio  

Using this model, the price is determined as follows:

EPS = Net Income/No of shares

EPS = 815,000/245,000

      = 3.326530612

Share price =  3.326530612  × 16 = 53.22

Share price = $53.22

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Four investors bought a real estate asset together and decided to divide the profits equally. Investor A invested $200,000; inve
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$150,000

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If the profits were divided according to investment percentage he would have gotten 200,000 / (200,000 +500,000 + 800,000+500,000) x $1m = $100,000.

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