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QUESTION 7 The Price/Earnings multiple for the typical firm in the auto parts industry is 13. You are trying to value a new a
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Answer #1

We generally multiply earnings of company with price earnings ratio of a industry to calculate fair value of the share

P/e ratio of the industry is 13

Earnings of the new company is 5.28

Price of the new company shall be 13×5.28 = 68.64

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