Using time series analysis you project that the Widget Index's sales per share will be $1,000. You also project that:
Assuming a P/E ratio of 10X, project the Widget Index's value at year-end?
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A. B. C. D.D
= [($Sales)(EBDIT profit margin) - ($D) - ($I)](1 - T)= [($1,000)(.15) - ($50) - ($30)](1 - .30) = $49Price at end = EPS(P/E) = (49)(10) = 490
To calculate the Widget Index's value at year-end, we need to multiply the projected sales per share by the P/E ratio.
Given: Projected sales per share = $1,000 P/E ratio = 10X
To find the value at year-end, we multiply the projected sales per share by the P/E ratio:
Value at year-end = Projected sales per share * P/E ratio
Value at year-end = $1,000 * 10
Value at year-end = $10,000
Therefore, the Widget Index's value at year-end is $10,000.
None of the given answer choices match the calculated value of $10,000. It seems there might be an error or discrepancy in the provided answers.