If the company is in an industry with pe ratios that range


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Boston Corp. has an outstanding convertible bond with a face value of $1,000. The bond can be converted into 12 shares of common stock.

Boston Corp. is trading at $80 per share. It pays an annual dividend of $1.60 per share, and analysts expect it to trade at $82 one year from now.

Boston Corp. has just reported earnings per share of $3.20. If the company is in an industry with PE ratios that range from 18 to 20, what is a reasonable price range for Boston Corp.?

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Financial Management: If the company is in an industry with pe ratios that range
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