Dixie Down Has Expected Earnings After Taxes for Year 5

question 44

Multiple Choice

Dixie Down has expected earnings after taxes for Year 5 of $385,000 and has 60,000 outstanding shares.The current value of the firm's earnings for the next five years,Years 1 through 5,is $567,000.The comparable PE for the firm is 11.4.What is the estimated value of one share of this stock if the required rate of return is 16 percent?

• A)$74.15
• B)$77.85
• C)$82.60
• D)$88.80
• E)$90.31

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A cognitive ability described by Piaget, indicating that a child understands that properties like volume and number remain the same regardless of changes in form or appearance.

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