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How much should a share of stock be worth for a firm whose earnings per share...

How much should a share of stock be worth for a firm whose earnings per share are $4 if the industry's average P/E is 11?

Select one:

a. $48

b. $88

c. $44

d. $40

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Answer #1

average P/E is equal to=Stock price/EPS

Stock price=(4*11)

which is equal to

=$44.

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