An investor estimates that next year’s sales for New World Products should amount to about $75 million. The company has 2.5 million shares outstanding, generates a net profit margin of about 5%, and has a payout ratio of 50%. All figures are expected t hold for next year. Given this information, compute the following.,a. Estimated net earnings for the next year,b. Next year’s dividends per share,c. The expected price of the stock (assuming the P/E ratio is 24.5 times earnings).,d. The expected holding period return (latest stock price: $25 per share).
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