Given the information below for Seger Corporation, compute the expected share pr

Question

Given the information below for Seger Corporation, compute the expected share price at the end of 2014 using price ratio analysis. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.) Year 2008 2009 2010 2011 2012 2013 Price $ 62.90 $ 68.80 $ 67.50 $ 65.00 $ 86.50 $ 101.90 EPS 3.25 3.96 4.76 5.46 7.55 8.55 CFPS 7.82 8.68 9.04 10.67 12.13 13.32 SPS 39.80 44.80 44.20 47.70 58.90 66.90 Using P/E ratio $ Using P/CFPS ratio $ Using P/S ratio $

Explanation / Answer

Year 2008 : Year 2008 : Year 2008

P/E Ratio = PPS/EPS P/CFPS Ratio = PPS/CFPS P/S Ratio = SP/SPS

= 62.90/3.25 = 62.90/7.82 = 62.90/39.80

= 19.35 = 8.04 = 1.58

P/E Ratio = PPS/EPS P/CFPS Ratio = PPS/ CFPS P/S Ratio = SP/SPS

Year 2009   Year 2009 : Year 2009 :

= 68.80/3.96 = 68.80/8.68 = 68.80/44.80

=17.37 = 7.93 = 1.54

P/E Ratio = PPS/EPS P/CFPS Ratio = PPS/CFPS P/S Ratio = SP/SPS

Year 2010 : Year 2010 Year 2010 ::

= 67.50/4.76 = 67.50/9.04 = 67.50/44.20

= 14.18 = 7.47 = 1.53

P/E Ratio = PPS/EPS P/CFPS Ratio = PPS/CFPS P/S Ratio = SP/SPS

Year 2011 Year 2011 Year 2011 :: :

= 65.00/5.46 = 65.00/10.67 = 65.00/47.70

= 11.90 = 6.09 = 1.36

P/E Ratio = PPS/EPS P/CFPS Ratio = PPS/CFPS P/S Ratio = SP/SPS

Year 2012 Year 2012 Year 2012 :: :

= 86.50/7.55 = 86.50/12.13 = 86.50/58.90

= 11.46 = 7.13 = 1.47

P/E Ratio = PPS/ EPS P/CFPS Ratio = PPS/CFPS P/S Ratio = SP/SPS

Year 2013 Year 2013 Year 2013 : : :

= 101.90/8.55 = 101.90/13.32 = 101.90/66.90

= 11.92: = 7.65 = 1.52

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