you have a copy of investment survey and you have found the following numbers fo

Question

you have a copy of investment survey and you have found the following numbers for Indigo Inc.

***** 2008 2009 2010 2011 2012 average exp 2013

EPS 1.62 1.39 1.63 1.44 1.71 ? ?

P/E 23.3 31.4 23.5 30.9 30.5 ? ?

Price: ? ? ? ? ? ? ?

CFPS: 6.69 9.57 9.45 12.29 9.86 ? ?

P/CFPS: ? ? ? ? ? ? ?

SPS: 54.68 59.87 66.48 60.39 57.33 ? ?

P/SPS: ? ? ? ? ? ? ?

according to the same publication, the expected growth rates during 2012 to 2013 are the following: EPS = 4.9%, CFPS = 3.15%, and SPS = 2.61%. Running a price ratio analysis, find out the possible prices for 2013.   

Explanation / Answer

S.no ***** Tag 2008 2009 2010 2011 2012 Average exp 2013 1 EPS EPS     1.620     1.390     1.630     1.440     1.710      1.558        1.794 2 P/E Market Price / EPS 23.300 31.400 23.500 30.900 30.500    27.920      27.920 3 Price: 1*2 = 3 37.746 43.646 38.305 44.496 52.155    43.499      50.083 4 CFPS:     6.690     9.570     9.450 12.290     9.860      9.572      10.171 5 P/CFPS: 3*4 = 5     5.642     4.561     4.053     3.621     5.290      4.544        4.924 6 SPS: 54.680 59.870 66.480 60.390 57.330    59.750      58.826 7 P/SPS:     0.690     0.729     0.576     0.737     0.910      0.728        0.851

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