Question

The Sleeping Flower Co. has earnings of $1.75 per share. The benchmark PE for the company is 18. What stock price would you consider appropriate? (Round your answer to 2 decimal places. (e.g., 32.16)) Stock price $ What if the benchmark PE were 21? (Round your answer to 2 decimal places. (e.g., 32.16)) Stock price $

Answer 1

a) Stock price to be considered appropriate:-

=EPS*P/E ratio

=1.75*18

=31.50

b) Stock price to be considered appropriate:-

=EPS*P/E ratio

=1.75*21

=36.75