The Current Earnings Per Share for Axaon Corp

question 26

Multiple Choice

The current earnings per share for Axaon Corp. stock is $0.21. If the P/E ratio of the company is 32 and earnings are expected to grow at 12.1 percent, what is the expected stock price in five years?

• A) $7.63
• B) $11.90
• C) $9.12
• D) $8.67
• E) $6.72

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, reflected as a financial charge for the use of the borrowed money.

Carrying Value

The book value of assets and liabilities as reported in the financial statements, factoring in depreciation, amortization, and impairment.

Bond Redemption

The process in which an issuer repays the par or face value of a bond at or before maturity.

Unamortized Premium

The portion of the bond premium that has not yet been amortized or deducted from the interest expense over the bond's life.