Author Question: Global Warning's EPS for the current year is $2.75 and its current P/E ratio is 50. You have ... (Read 69 times)

mccallkeeler · **on:** Mar 29, 2022

Question 1

Even if a company does not officially follow a fixed-dividend policy, dividend payments are
◦ extremely difficult to predict.
◦ very volatile and subject to economic conditions.
◦ fairly stable from one time period to another.
◦ directly tied to a company's P/E ratio.

Question 2

Global Warning's EPS for the current year is $2.75 and its current P/E ratio is 50. You have forecasted that EPS will grow by 10% but the P/E ratio will fall to 40. What do you expect the price of a share of GW's stock to be at the end of next year?
◦ $110
◦ $121
◦ $137.50
◦ $151.25

Sophia0717 · **Reply #1 on:** Mar 29, 2022

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