Sully Corp. currently has an EPS of $2.14, and the benchmark PE ratio for the company is 20. Earnings are expected to grow at 7.5 percent per year.

What is the target stock price in 1 year?

Assuming that the company pays no dividends, what is the implied return on the company's stock over the next year?

45.23

To calculate the target stock price in 1 year, we can use the formula:

Target stock price = EPS * PE ratio

Given that the EPS for Sully Corp. is $2.14 and the benchmark PE ratio is 20, we can substitute these values into the equation:

Target stock price = $2.14 * 20

Target stock price = $42.80

Therefore, the target stock price for Sully Corp. in 1 year is $42.80.

Now, let's calculate the implied return on the company's stock over the next year. The implied return is the percentage increase in stock price without considering dividends. It can be calculated using the formula:

Implied return = (Target stock price - Current stock price) / Current stock price

In this case, since we don't have the current stock price, we need to find it using the EPS and PE ratio. We can rearrange the formula for the target stock price to solve for the current stock price:

Current stock price = Target stock price / PE ratio

Current stock price = $42.80 / 20

Current stock price = $2.14

Now we have the current stock price, we can calculate the implied return:

Implied return = ($42.80 - $2.14) / $2.14

Implied return = $40.66 / $2.14

Implied return ≈ 19.02

Therefore, the implied return on Sully Corp.'s stock over the next year is approximately 19.02%.