Ratio is considered a good estimate of the future ratio

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Reference no: EM13928211

1. Electronics Galore has historically had a P/E ratio of 23.4. This ratio is considered a good estimate of the future ratio. The firm currently has EPS of $1.68. These earnings are expected to increase by 4.2 percent next year. What is the expected price of this stock one year from now?

A. $39.31

B. $40.96

C. $41.25

D. $42.78

E. $43.79

2. Historically, Jones Trucking has had a P/E ratio of 14.6. The firm has current net income of $92,000 with 85,000 shares of stock outstanding. The EPS growth rate is 4.5 percent. What is the expected price of this stock one year from now?

A. $15.32

B. $15.85

c. $16.41

D. $16.51

E. $17.10

Reference no: EM13928211

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