1. A company is expected to generate $175,000 in earnings next period and requires a 20 percent return on equity capital. Using the assumptions of the price-earnings ratio what would be the company's value at the beginning of next period?
$781,250
$2,000,000
$1,250,000
$875,000
2. Wolverwine Company's current stock price is $55 per share and the company's trailing earnings per share were $2.10. Given that analysts are forecasting growth of 12% for Wolverwine, what is the company's PEG ratio?
21.2
1.52
2.97
2.18