Last Year the Price Earning Ratio Was 10 for the Market

question 18

Multiple Choice

Last year the price earning ratio was 10 for the market as a whole and was 20 for Hi Tek Plastics Ltd. Hi Tek's share price ended the year at $50.00. This year the economy is expected to boom and P/E multiple expansion is underway. At the end of the year, the P/E multiple is expected to be 20 for the market. If Hi Tek's is expected to be in the same risk class as last year and its net income is supposed to triple, at what price should Hi Tek's shares finish the year?

• A) $25.00
• B) $75.00
• C) $100.00
• D) $150.00
• E) $300.00

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Definitions:

Big Five Trait

Components of the Big Five personality model, representing five domains that describe human personality at a broad level.

Immoderation

The action or habit of not restraining oneself from indulgence in activities, often leading to excess or extreme behavior.

Anger

A strong feeling of annoyance, displeasure, or hostility triggered by what is perceived as wrong or injustice.

Big Five Trait

A framework outlining five extensive traits that characterize human personality: openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism.