The retail analyst at Morgan-Sachs values shares of the GAP at $38.00 per share.They are using the average industry 'forward' P/E ratio of 17.Their forecasted earnings per share for next year is [blank].

Question

Quizplus · Accepted Answer

To find the forecasted earnings per share for next year, we need to use the formula:

Forecasted EPS = Stock Price / P/E Ratio

We know the stock price (valued at $38.00 per share), and we are given the industry forward P/E ratio of 17. Plugging these values into the formula gives:

Forecasted EPS = $38.00 / 17 = $2.24

Therefore, the answer is (C) $2.24.

The Retail Analyst at Morgan-Sachs Values Shares of the GAP