The Perfect Rose Co. has earnings of $2.30 per share. The benchmark PE for the company...
|
The Perfect Rose Co. has earnings of $2.30 per share. The benchmark PE for the company is 16. |
| a. |
What stock price would you consider appropriate? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| b. | What if the benchmark PE were 19? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
Homework Answers
A)
Price earning ratio = stock price / EPS
Stock price = PE ratio × EPS
= 16 × $2.3
= $36.8
.
B)
Stock price = 19 × $2.3
= $43.7
.
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