What is the expected market price per share of common stock for next year?
（The current annual sales of Flower Bud, Inc. are $178,000. Sales are expected to increase by 4% next year. The company has a net profit margin of 5% which is expected to remain constant for the next couple of years. There are 10,000 shares of common stock outstanding. The market multiple is 16.4 and the relative P/E of the firm is 1.21. What is the expected market price per share of common stock for next year?）
Answer ：
If Flower Bud were a real company I would answer this question. But since market multiples and PEs don’t remain the same over time, I don’t see the relevance of the data in providing input to the formula.
Posted: August 8th, 2010 under US Stock Market.
Tags: expected market price