Unformatted text preview: Stock: Most Recent Dividend: $2.89 Growth Rate: 5% Price of the Stock: $65.72 4. If the average P/E ratio for the department store industry is 25, and Target’s Earnings per Share is: $1.45. What should the stock’s price be? 5. If Macy’s recent earnings per share was $4.36, payout ratio is 70%, earnings are expected to go at 6% for the next 4 years, then the earnings growth rate will instantaneously drop to 4%. Your expected return on the stock is 9%. What should the stock’s price be today?...
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- Spring '08
- Dividend yield, P/E ratio, Constant Dividend Discount