BDE's three most recent P/Es are 30.30, 32.2, and 40.4. Its current EPS is expected to...
BDE's three most recent P/Es are 30.30, 32.2, and 40.4. Its current EPS is expected to be $2.5. If its current price is $50.77, is it over or under valued?
Homework Answers
| Expected PE Ratio = Market Share Price / Earning per share | ||
| Expected PE Ratio = | ||
| Market Shares Price = | $ 50.77 | |
| Divide by | "/" By | |
| Expected Earning per shares | $ 2.50 | |
| Expected PE Ratio = | $ 20.31 | |
| Recent PE Ratio is much higher than expected PE Ratio | ||
| It means the Market price of the share is increased so it means share is over valued now. | ||
| Answer = Share price is overvalued | ||
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