Question

Regal incorporated has an eps of $2.37 and an earnings growth rate of 7 percent. What is the expected earnings per share after one year?

1) $2.54
2) $2.53
3) $2.52
4) $2.51

Answer 1

To find the expected earnings per share for Regal Incorporated after one year with a 7% growth rate, multiply the current EPS of $2.37 by 1.07. The result is $2.5359, which, when rounded to the nearest cent, is $2.54.

Step-by-step explanation:

The question is about calculating the expected earnings per share (EPS) after one year for Regal Incorporated, given an initial EPS of $2.37 and an earnings growth rate of 7 percent.

To find the expected EPS after one year, we can use the following formula:

Expected EPS = Current EPS × (1 + Growth Rate)

In this case:

Expected EPS = $2.37 × (1 + 0.07)

Expected EPS = $2.37 × 1.07

Expected EPS = $2.5359

When rounded to the nearest cent, the expected EPS after one year is $2.54.

The expected earnings per share after one year can be calculated using the formula:

EPS after one year = EPS * (1 + Growth rate)

Given that the EPS of Regal Incorporated is $2.37 and the earnings growth rate is 7%, we can substitute these values into the formula:

EPS after one year = $2.37 * (1 + 0.07) = $2.37 * 1.07 = $2.5369

Rounding to two decimal places, the expected earnings per share after one year is $2.54.