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.) 2008 2009 2010 2013 Year Price EPS CFPS SPS 2011 2012 $81.90 $ 87.80 $ 86.50 $ 84.00 $105.50 $ 120.90 8.40 13.26 91.10 3.20 7.67 64.00 3.91 8.56 69.00 4.71 8.95 68.40 5.41 10.52 71.90 7.40 12.04 83.10 Using P/E ratio Using P/CFPS ratic Using P/S ratio $ 123.90

Explanation / Answer

Year 2008 2009 2010 2011 2012 2013 Average Expected Growth ratio in 2014 [value in 2013*(1+average growth rate)] Expected price 2014 (   Price $81.90 $87.80 $86.50 $84.00 $105.50 $120.90 EPS $3.20 $9.91 $4.71 $5.41 $7.40 $8.40 $12.14 $196.19 Growth (YoY) 209.69% -52.47% 14.86% 36.78% 13.51% 44.47% [EPS (2014)*Avg. P/E ratio] Price/EPS (P/E ratio) 25.59 8.86 18.37 15.53 14.26 14.39 16.17 CFPS $7.67 $8.56 $8.95 $10.52 $12.04 $13.26 $14.81 $139.33 Growth (YoY) 11.60% 4.56% 17.54% 14.45% 10.13% 11.66% [CFPS (2014)*Avg. P/CFPS ratio] Price/CFPS (P/CFPS ratio) 10.68 10.26 9.66 7.98 8.76 9.12 9.41 SPS 64.00 69.00 68.40 71.90 83.10 91.10 $97.89 $123.70 Growth (YoY) 7.81% -0.87% 5.12% 15.58% 9.63% 7.45% [SPS (2014)*Avg. P/SPS ratio] Price/SPS (P/SPS ratio) 1.28 1.27 1.26 1.17 1.27 1.33 1.26 Using P/E ratio $196.19 Using P/CFPS ratio $139.33 Using P/S ratio $123.70

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