CD Bargain Barn is forecasting earnings per share of $3.25 next year. Its investors require a return of 15.5%.
a. What is the no-growth value of CD’s stock? (Round your answer to 3 decimal places.)
No-growth value $
b. If the stock’s price is currently $44, what is the present value of growth opportunities (PVGO)? (Round your answer to 3 decimal places.)
PVGO $
c. What is the implied P/E ratio for CD’s stock? (Round your answer to 2 decimal places.)
Implied P/E ratio