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	2011		2012		2013		2014		2015		2016
Price	$	100.50	$	106.40	$	105.10	$	102.60	$	124.10	$	139.50
EPS		2.65		3.36		4.16		4.86		7.50		8.50
CFPS		7.77		8.64		9.01		10.62		12.10		13.30
SPS		57.60		62.60		62.00		65.50		76.70		84.70

Using P/E ratio

Using P/CF ratio
Using P/S ratio

Answer 1

		Year	2011	2012	2013	2014	2015	2016	Average	2017
		Price	100.5	106.4	105.1	102.6	124.1	139.5		Expected
		EPS	2.65	3.36	4.16	4.86	7.5	8.5		10.7964148	(8.5*1.27016644)
		P/E=Price/EPS	37.9245283	31.6666667	25.2644231	21.1111111	16.5466667	16.4117647	24.8208601	24.8208601
		EPS Growth		0.26792453	0.23809524	0.16826923	0.54320988	0.13333333	0.27016644
		CFPS	7.77	8.64	9.01	10.62	12.1	13.3		14.8215647	(13.3*1.11440336)
		P/CF=Price/CFPS	12.9343629	12.3148148	11.6648169	9.66101695	10.2561983	10.4887218	11.2199886
		CFPS Growth		0.11196911	0.04282407	0.17869034	0.1393597	0.09917355	0.11440336
		SPS	57.6	62.6	62	65.5	76.7	84.7		91.6279069	(84.7*1.08179347)
		P/S=Price/SPS	1.74479167	1.69968051	1.69516129	1.56641221	1.61799218	1.64698937	1.66183787
		SPS Growth		0.08680556	-0.00958466	0.05645161	0.17099237	0.10430248	0.08179347
	Expected Share Price in 2017 using P/E ratio	$267.98	(Average P/E Ratio)*(Expected EPS)			(24.8208601*10.7964148)
	Expected Share Price in 2017 using P/CF ratio	$166.30	(Average P/CF Ratio)*(Expected CFS)			(11.2199886*14.8215647)
	Expected Share Price in 2017 using P/S ratio	$152.27	(Average P/S Ratio)*(Expected SPS)			(1.66183787*91.6279069)