Homework Answers
| The P/E ratio measures the market value of the stock relative to earnings per share. | |||||
| P/E ratio i.e. price earning ratio shows that what the market is willing to pay for a stock based on | |||||
| its current earnings.It is calculated by dividing the market value price per share by the earnings per share. | |||||
| A company with a high P/E ratio usually indicated positive future performance and investors are | |||||
| willing to pay more for this company’s shares.Poor ratio indicates poor current and future performance. | |||||
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30 The P/E ratio measures the O intrinsic value of the stock relative to earnings per...
The price earnings (P/E) ratio is 5. The earnings per share over the last twelve months...
The price earnings (P/E) ratio is 5. The earnings per share over the last twelve months is $5.20. Common stock has a par value of $1 per share and was issued at $9 per share. What is the current market price of the stock? Select one: a. $46.80 b. $45.00 c. $5.00 d. $26.00
PRICE/EARNINGS RATIO A company has an EPS of $3.30, a book value per share of $30.69,...
PRICE/EARNINGS RATIO A company has an EPS of $3.30, a book value per share of $30.69, and a market/book ratio of 3.7x. what is its P/E ratio? The stock price should be rounded to the nearest cent. Round your answer to two decimal places.
PRICE/EARNINGS RATIO A company has an EPS of $4.20, a book value per share of $39.06,...
PRICE/EARNINGS RATIO A company has an EPS of $4.20, a book value per share of $39.06, and a market/book ratio of 1.9x. What is its P/E ratio? The stock price should be rounded to the nearest cent. Round your answer to two decimal places.
(Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation,...
(Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions: • the investor's required rate of return is 13 percent, • the expected level of earnings at the end of this year (E1) is $4, • the firm follows a policy of retaining 30 percent of its earnings, • the return on equity (ROE) is 15 percent, and • similar shares of...
Problem 4-5 Price/Earnings Ratio A company has an EPS of $4.05, a book value per share...
Problem 4-5 Price/Earnings Ratio A company has an EPS of $4.05, a book value per share of $43.74, and a market/book ratio of 3.0x. What is its P/E ratio? The stock price should be rounded to the nearest cent. Round your answer to two decimal places.
A firm with earnings per share of $8 and a price-earnings ratio of 10 will have...
A firm with earnings per share of $8 and a price-earnings ratio of 10 will have a stock price of O $80.00 O $18.00 O $6.00 the market assigns a stock price independent of EPS and the P/E ratio.
Price-to-Earnings ratio is often used to gauge the relative cost of one stock to another with respect to earnings. The...
Price-to-Earnings ratio is often used to gauge the relative cost of one stock to another with respect to earnings. The average P-to-E (or P/E) is 15 to 25 for most companies in the market. If a company is trading with a P/E of 85, should you buy the stock? O a. Yes, the shares are cheap. b. The P/E is a bad proxy for value and is never used in reality. o c. Provided other shares in the market are...
Question 9: (10 points). (Relative valuation of common stock) Using the P/E ratio approach to valuation,...
Question 9: (10 points). (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions .the investor's required rate of return is 13 percent, the expected level of earnings at the end of this year (E1) is $8, the firm follows a policy of retaining 40 percent of its earnings, the return on equity (ROE) is 15 percent, and similar shares of stock sell at multiples of...
Price-to-Earnings ratio is often used to gauge the relative cost of one stock to another with...
Price-to-Earnings ratio is often used to gauge the relative cost of one stock to another with respect to earnings. The average P-to-E (or P/E) is 15 to 25 for most companies in the market. If a company is trading with a P/E of 85, should you buy the stock? O a. Yes, the shares are cheap. b. The P/E is a bad proxy for value and is never used in reality. o c. Provided other shares in the market are...
P/E Ratio and Stock Price International Business Machines (IBM) has earnings per share of $7.80 and...
P/E Ratio and Stock Price International Business Machines (IBM) has earnings per share of $7.80 and a P/E ratio of 15.38. What is the stock price? Multiple Choice $46.36 $.51 $1.97 $119.96
PRICE/EARNINGS RATIO A company has an EPS of $3.30, a book value per share of $30.69, and a market/book ratio of 3.7x. what is its P/E ratio? The stock price should be rounded to the nearest cent. Round your answer to two decimal places.
PRICE/EARNINGS RATIO A company has an EPS of $4.20, a book value per share of $39.06, and a market/book ratio of 1.9x. What is its P/E ratio? The stock price should be rounded to the nearest cent. Round your answer to two decimal places.
(Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions: • the investor's required rate of return is 13 percent, • the expected level of earnings at the end of this year (E1) is $4, • the firm follows a policy of retaining 30 percent of its earnings, • the return on equity (ROE) is 15 percent, and • similar shares of...
Problem 4-5 Price/Earnings Ratio A company has an EPS of $4.05, a book value per share of $43.74, and a market/book ratio of 3.0x. What is its P/E ratio? The stock price should be rounded to the nearest cent. Round your answer to two decimal places.
A firm with earnings per share of $8 and a price-earnings ratio of 10 will have a stock price of O $80.00 O $18.00 O $6.00 the market assigns a stock price independent of EPS and the P/E ratio.
Price-to-Earnings ratio is often used to gauge the relative cost of one stock to another with respect to earnings. The average P-to-E (or P/E) is 15 to 25 for most companies in the market. If a company is trading with a P/E of 85, should you buy the stock? O a. Yes, the shares are cheap. b. The P/E is a bad proxy for value and is never used in reality. o c. Provided other shares in the market are...
Question 9: (10 points). (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions .the investor's required rate of return is 13 percent, the expected level of earnings at the end of this year (E1) is $8, the firm follows a policy of retaining 40 percent of its earnings, the return on equity (ROE) is 15 percent, and similar shares of stock sell at multiples of...
Price-to-Earnings ratio is often used to gauge the relative cost of one stock to another with respect to earnings. The average P-to-E (or P/E) is 15 to 25 for most companies in the market. If a company is trading with a P/E of 85, should you buy the stock? O a. Yes, the shares are cheap. b. The P/E is a bad proxy for value and is never used in reality. o c. Provided other shares in the market are...
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