The current price of Parador Industries stock is $47 per share. Current earnings

Question

The current price of Parador Industries stock is $47 per share. Current earnings per share are $5, the earnings growth rate is 7 percent, and Parador does not pay a dividend. The expected return on Parador stock is 19 percent. 1. Calculate the earning per share one-year ahead. (Round your answer to 2 decimal places. Omit the ''$'' sign in your response.) Earning per share $ 2. Calculate the P/E ratio one-year ahead. (Do not round intermediate calculations. Round your answer to 2 decimal places.) P/E ratio

Explanation / Answer

Current Xtock Price = 47

Current EPS = 5

Gowth rate = 7%

Exp Return = 19%.

EPS one year ahead = Current EPS (1+ growth rate) = 5 ( 1.07) = 5.35

P/E one year ahead = Current price / EPS one year ahead = 47/ 5.35 = 8.78

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