Problem 8.26 – Calculation of Stock Price, Target Price, and Implied Return

Fundamentals of Corporate Finance

Ross, Westerfield, and Jordan

13th Edition

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Difficulty – Medium

Estimate the current stock price, target stock price in one year, and the implied return on the stock of Meadow Dew Corporation. Use the given earnings per share (EPS), benchmark price-to-earnings (PE) ratio, and the expected annual growth rate in earnings. Round your answers to two decimal places.

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