FINANCE Investment Analysis and Portfolio Management CHAPTER 12 PROBLEM 7
You are given the following estimated per share data related to the S&P Industrials Index for the year 2007:
Sales: $1,020.00
Depreciation: 45.00
Interest expense: 18.00
You are also informed that the estimated operating profit margin is 0.152 and the tax rate is 32 percent.
a. Compute the estimated EPS for 2007.
b. Assume that a member of the research committee for your firm feels that it is important to consider a range of operating profit margin (OPM) estimates. Therefore, you are asked to derive both optimistic and pessimistic EPS estimates using 0.149 and 0.155 for the OPM and and holding everything else constant.