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30- The current earnings-per-share of a corporation is $2. The implied price-earning ratio is 25. The...

30- The current earnings-per-share of a corporation is $2. The implied price-earning ratio is 25. The present value of future cash flows per share is

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Answer #1
Solution:
Present value of future cash flows per share = $50
Working Notes:
Present value of future cash flows per share is the current price per share of the corporation.
Earnings per share (EPS) = $2
Price Earnings ratio (P/E) = 25
current price per share of the corporation = EPS x P/E
= $ 2 x 25
=$50 per share
Present value of future cash flows per share = $50 per share
Please feel free to ask if anything about above solution in comment section of the question.
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