Description of this paper

If the P/E ratio of a company's common stock were...

Description

Solution


Question

If the P/E ratio of a company's common stock were 12, and its earnings were $2.50 per common share: a. the market value of the common stock would be $20.83 per share. b. the market value of the common stock would be $25.00 per share. c. an increase in earnings of $0.20 per share, with no change in the multiple, would result in a market price increase of $2.40 per share. d. an increase in earnings of $0.20 per share, with no change in the multiple, would result in a market price increase of $1.67 per share.

 

Paper#3178 | Written in 18-Jul-2015

Price : $25
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