Fontaine Inc. recently reported net income of $6 million. It has 620,000 shares
ID: 2696373 • Letter: F
Question
Fontaine Inc. recently reported net income of $6 million. It has 620,000 shares of common stock, which currently trades at $31 a share. Fontaine continues to expand and anticipates that 1 year from now, its net income will be $8.1 million. Over the next year it also anticipates issuing an additional 93,000 shares of stock so that 1 year from now it will have 713,000 shares of common stock. Assuming Fontaine's price/earnings ratio remains at its current level, what will be its stock price 1 year from now? Round your answer to the nearest cent.
Explanation / Answer
Its stock price 1 year from now = $36.39