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You are evaluating the stock price of​ Kroger, a grocery store chain. It has forward earnings...

You are evaluating the stock price of​ Kroger, a grocery store chain. It has forward earnings per share of $3.33. You notice that its competitor Safeway has a​ P/E ratio of 12.1. What is a good estimate of​ Kroger's stock​ price? The stock price will be? (Round to the nearest​ cent.)

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Answer #1

Stock price = PE ratio × Earnings per share = 12.1 × $3.33 = $40.29

  

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