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An investor estimates that next year's sales for N...

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An investor estimates that next year's sales for New World Products should amount to about $75 million. The company has 2.5 million shares outstanding, generates a net profit margin of about 5%, and has a payout ratio of 50%. All figures are expected t hold for next year. Given this information, compute the following. a. Estimated net earnings for the next year b. Next year's dividends per share c. The expected price of the stock (assuming the P/E ratio is 24.5 times earnings). d. The expected holding period return (latest stock price: $25 per share).

 

Paper#8634 | Written in 18-Jul-2015

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