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Estimate net earnings for next year

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Question: An investor in Amman, Jordan, estimates that next year's sales for Amman Intercontinental Hotels, Inc. would amount to about 150 million Jordanian dinar. The company has 10 million shares outstanding, generates a net profit margin of about 15%, and has a payout ratio of 40%. All figures are expected to hold for next year. Given this information, compute the following:

a. Estimated net earnings for next year

b. Next year's dividends per share

c. The expected price of the stock (assuming the P/E ratio is 24.5 times earnings)

d. The expected holding period return (latest stock price: 40 Jordanian dinar per share)

Reference no: EM131626087

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