Company XYZ closed at $52.29 per share with a P/E ratio of 14.03. A. How much...

Question

Question

Company XYZ closed at $52.29 per share with a P/E ratio of 14.03.

A. How much were earnings per share?

B .Does the stock seem overpriced, underpriced, or about right given that the historical P/E ratio is 12-14?

Answer 1

Answer #1

Given

a)

P/E ratio = 14.03

P/E ratio=price per share/Earnings per share

Here

Price per share = $52.29

Earnings per share = 52.29/14.03

Earnings per share = $3.727

b)

historical P/E ratio is 12-14

P/E ratio is greater than average historical P/E ratio.

Stock seems overpriced

Add a comment

Answer 2

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