Question

You are consider buying GM stock. Their earnings per share last year were $4.75 and their P/E ratio is currently 7. You believe that Ford is a good comparable for GM. Fords earning per share were 2.20 and their P/E ratio is currently 12. Using Ford as a comparable how much is GM worth? (round to 2 decimal places) Group of answer choices $26.40 $15.40 $57 $33.25

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

PE EPS, STOCK DIVIDEND - Microsoft Excel (Product Activation Failed) View Add-Ins File Home Insert Page Layout Formulas Data Review - 2x % Cut Calibri = = = Dr General 11AA B- A Wrap Text Merge Merge & Center - Center B I U SF $ % % , 4:0 .00 :.: Insert Delete Format E Copy Paste Format Painter Clipboard KM71 Conditional Format Formatting as Table Styles Cell Styles Σ AutoSum : A Fill Sort & Clear Filter Editing Find & Select Font Alignment Number Cells KL KM KN KO KP KO KR KSKT KU 56 57 TO USE COMPARABLE METHOD, WE WILL TAKE INTO ACCOUNT EPS OF GM AND P/E OF FORD P/E FORD = EPS OF GM = 12 4.75 58 59 60 61 62 63 64 65 ANSWER 66 PRICE OF GM = P/E FORD X EPS OF GM PRICE OF GM = 12 X 4.75 PRICE OF GM = 57 67 68 69 70 71 72 73 74 H N NAV HEDGE FUND ME EV PE EPS DIV ABNORMAL deberk MARGIN MONEY marginal tax PB ROPI APV ROSS price quote EVA MVA STOCK DIV ferences Rea LEVERAGED BUY SWAI BOJ 130% - 0 * K *0 ENG 07-11-2019 S E O