Blue Hamster Manufacturing Inc. just reported earnings after tax (also called net income) of $8,000,000, and a current stock price of $39.50 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 1,500,000 new shares of stock (raising its shares outstanding from 5,500,000 to 7,000,000). If Blue Hamster’s forecast turns out to be correct and its price-to-earnings (P/E) ratio does not change, what does the company’s management expect its stock price to be one year from now? (Note: Round intermediate calculations to four decimal places. Round the expected stock price to two decimal places.) $38.80 per share $40 per share $29.10 per share $48.50 per share

$38.80 per share

Explanation:

The computation of the stock price one year from now is shown below:

But before that first need to do the following calculations

Current Year Price earning ratio is

= ($39.50 × 5,500,000) ÷ $8,000,000

= $27.15

Now  

Next year earnings = $8,000,000 × (1 + 25%)

= $10,000,000

Finally,

Share price next year = ($10,000,000 × $27.15) ÷ 7,000,000

= $38.80 per share

answer; i believe the correct answer is (form utility); good luck

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know