Last year the price earning ratio was 10 for the market as a whole and was 20 for Hi Tek Plastics Ltd. Hi Tek's share price ended the year at $50.00. This year the economy is expected to boom and P/E multiple expansion is underway. At the end of the year, the P/E multiple is expected to be 20 for the market. If Hi Tek's is expected to be in the same risk class as last year and its net income is supposed to triple, at what price should Hi Tek's shares finish the year?
A) $25.00
B) $75.00
C) $100.00
D) $150.00
E) $300.00
Correct Answer:
Verified
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