Electronics Galore Has Historically Had a P/E Ratio of 22

question 78

Multiple Choice

Electronics Galore has historically had a P/E ratio of 22.1. This ratio is considered a good estimate of the future ratio. The firm currently has EPS of $1.78. These earnings are expected to increase by 5.0 percent next year. What is the expected price of this stock one year from now?

• A)$39.31
• B)$40.96
• C)$41.30
• D)$42.78
• E)$43.79

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Definitions:

Almonds

Edible seeds from the almond tree, often consumed raw, roasted, or used as a flavoring agent in various dishes.

Crude Oil

A naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials.

Producer Surplus

is the difference between the amount producers are willing to accept for a good or service versus what they actually receive.

Consumer Surplus

The discrepancy between the sum consumers are ready and able to spend on a good or service and the sum they end up paying.