Kellogg Co. (K) recently earned a profit of $2.42 earnings per share and has a P

Question

Kellogg Co. (K) recently earned a profit of $2.42 earnings per share and has a P/E ratio of 19.45. The dividend has been growing at an 8 percent rate over the past few years.

If this growth rate continues, what would be the stock price in four years if the P/E ratio remained unchanged? What would the price be if the P/E ratio declined to 18 in four years? (Round your answers to 2 decimal places.)

Kellogg Co. (K) recently earned a profit of $2.42 earnings per share and has a P/E ratio of 19.45. The dividend has been growing at an 8 percent rate over the past few years.

Explanation / Answer

EPS 2.42 PE 19.45 Growt rate of divedend 8% Current stock price 47.069 Stock price after 4 years 64.03685 current stock price *(1+growh rate)^4 EPS after 4 years 3.292383 current eps*(1+growth rate)^4 Price if PE is 18 after 4 years 59.2629

Related Questions

Navigate

• Browse (All)
• Browse K
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.