Suppose Zart Corp. recently earned a profit of $5.10 per share and has a P/E...
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Suppose Zart Corp. recently earned a profit of $5.10 per share and has a P/E ratio of 15 . The profits per share have been growing at a 6 percent rate over the past few years. If this growth continues, what would be the stock price in four years if the P/E ratio remained unchanged? Hint: This is a two-step problem. Estimate first the profit per share for year 4. Then, apply the P/E model. $90.57 $96.59 $91.44 $92.88
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