Penguin, Incorporated, has balance sheet equity of $5.8 million. At the same time, the income statement shows net income of $864,200. The company paid dividends of $466,668 and has 100,000 shares of stock outstanding. If the benchmark PE ratio is 22, what is the target stock price in one year? Assume the firm will grow at the sustainable growth rate. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Target stock price

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Penguin, Incorporated, has balance sheet equity of $5.8 million. At the same time, the
income statement shows net income of $864,200. The company paid dividends of
$466,668 and has 100,000 shares of stock outstanding. If the benchmark PE ratio is 22,
what is the target stock price in one year? Assume the firm will grow at the sustainable
growth rate. (Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)
Target stock price
Transcribed Image Text:Penguin, Incorporated, has balance sheet equity of $5.8 million. At the same time, the income statement shows net income of $864,200. The company paid dividends of $466,668 and has 100,000 shares of stock outstanding. If the benchmark PE ratio is 22, what is the target stock price in one year? Assume the firm will grow at the sustainable growth rate. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Target stock price
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