We appreciate your visit to Fontaine Inc recently reported net income of 2 million It has 500 000 shares of common stock which currently trade at 40 per share Fontaine. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
Answer:
$50
Explanation:
Given,
Current Net income = $2,000,000
No. of common shares today = 500,000
Current market price per share = $40
Anticipated Net income in 1 year = $ 3,250,000
Anticipated No. of common shares in 1 year = 500,000 +150000 =650,000
From this data, then
The current Earnings Per Share(EPS) = [tex]\frac{2,000,000}{500,000} = 4[/tex]
Current Price/Earning ratio = [tex]\frac{ Price per share}{EPS} = \frac{40}{4} = 10[/tex]
Anticipated EPS in 1 year=[tex]\frac{Anticipated Net income in 1 year }{Anticipated No. of common shares in 1 year } = \frac{3,250,000}{650,000} = $5[/tex]
If the company's P/E ratio remain as that of the current at 10, then
The anticipated price of stock in 1 year = Anticipated EPS * P/E ratio in 1 year
= $5 *10 = $50
Thanks for taking the time to read Fontaine Inc recently reported net income of 2 million It has 500 000 shares of common stock which currently trade at 40 per share Fontaine. We hope the insights shared have been valuable and enhanced your understanding of the topic. Don�t hesitate to browse our website for more informative and engaging content!
- Why do Businesses Exist Why does Starbucks Exist What Service does Starbucks Provide Really what is their product.
- The pattern of numbers below is an arithmetic sequence tex 14 24 34 44 54 ldots tex Which statement describes the recursive function used to..
- Morgan felt the need to streamline Edison Electric What changes did Morgan make.
Rewritten by : Barada
