New York Times Co. (NYT) recently earned a profit of $1.21 per share

P/E Ratio Model and Future Price

New York Times Co. (NYT) recently earned a profit of $1.21 per share and has a P/E ratio of 19.59.  The dividend has been growing at a 7.25 percent rate over the past six years. If this growth rate continues, what would be the stock price in five years if the P/E ratio remained unchanged?  What would the price be if the P/E ratio increased to 22 in five years? 

Here’s the SOLUTION

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