Question

You have found the following historical information for DEF Company:                          Year1     

You have found the following historical information for DEF Company:

                         Year1       Year 2        Year 3        Year 4

Stock Price        $45.33         $50.55          $54.39          $55.68

EPS                  $2.07 $2.42    $3.11    $3.42

Earnings are expected to grow at 5 percent for the next year. Using the company's historical average PE as a benchmark, what is the target stock price in one year? Answer to two decimals.

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Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

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