Markhem Enterprises is expected to earn a net income of $75,000 this year. The company has...
Markhem Enterprises is expected to earn a net income of $75,000 this year. The company has 40,000 common shares outstanding. Each share is currently trading in the market at a multiple of 18 times. What should be the stock price of this company?
Homework Answers
Income=$75000
Shares outstanding=40000
Earnings per share (EPS)= 1.875 (75000/40000)
PE Mutiple=18
stock price= EPS*PE multiple= 1.875*18= $33.75
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