Implied return on the company stock


Sully Corp. currently has an EPS of $2.90, and the benchmark PE for the company is 28. Earnings are expected to grow at 5 percent per year.

1) What is your estimate of the current stock price?

2) What is the target stock price in one year?

3) Assuming the company pays no dividends, what is the implied return on the company's stock over the next year?

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Finance Basics: Implied return on the company stock
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