Question

Given the information below for Seger Corporation, compute the expected share price at the end of 2017 using price ratio analysis. Assume that the historical average growth rates will remain the same for 2017. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Year Price EPS CFPS SPS 2011 $ 84.90 2.70 7.92 66.50 2012 $ 90.80 3.41 8.76 71.50 2013 $ 89.50 4.21 9.10 70.90 2014 $ 87.00 4.91 10.77 74.40 2015 $ 108.50 7.65 12.19 85.60 2016 $ 123.90 8.65 13.36 93.60 Share price Using P/E ratio Using P/CF ratio Using P/S ratio

Answer 1

rate positively ..

	Year	2011	2012	2013	2014	2015	2016
	Price	84.90	90.80	89.50	87.00	108.50	123.90
	EPS	2.70	3.41	4.21	4.91	7.65	8.65
	CFPS	7.92	8.76	9.10	10.77	12.19	13.36
	SPS	66.50	71.50	70.90	74.40	85.60	93.60
Ans 1	Using PE Ratio
	P/E ratio	31.44	26.63	21.26	17.72	14.18	14.32
	EPS Growth rate =		26.30%	23.46%	16.63%	55.80%	13.07%
	Average EPS growth rate =		27.05%
	share price using PE Ratio =			14.32*8.65*113.07%			140.10
Ans 2	Using P/CF ratio
	P/CF =	10.72	10.37	9.84	8.08	8.90	9.27
	CFPS growth rate=		10.61%	3.88%	18.35%	13.18%	9.60%
	Average CFPS growth rate =		11.12%
	Share price using P/CF ratio =			9.27*13.36*111.12%			137.68
Ans 3	Using P/S ratio
	P/S =	1.28	1.27	1.26	1.17	1.27	1.32
	SPS growth rate =		7.52%	-0.84%	4.94%	15.05%	9.35%
	Average SPS growth rate =		7.20%
	Share price using P/S ratio =			1.32*93.6*107.2%			132.82