Explore BrainMass

Explore BrainMass

    Market Value Ratio - Lane Inc

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Lane Inc. just reported net income of $3,000,000, and its current stock price is $30 per share. Lane is forecasting $4,000,000 in net income next year, but it also expects it will have to issue 300,000 new shares of stock (raising its shares outstanding from 1,500,000 to 1,800,000). If Lane's forecast turns out to be right, and its price/earnings (P/E) ratio does not change, what does Lane expect its stock price to be one year from now?

    © BrainMass Inc. brainmass.com June 3, 2020, 11:15 pm ad1c9bdddf
    https://brainmass.com/business/international-markets/market-value-ratio-lane-270955

    Solution Preview

    Current Price earnings ratio= Current stock price/Current EPS.

    Current EPS= Net ...

    Solution Summary

    Response provides steps to compute market value ratio.

    $2.19

    ADVERTISEMENT