Stocks commonly trade at a PE ratio somewhere between 15 and 20. Investors pursue two basic...

Stocks commonly trade at a PE ratio somewhere between 15 and 20.

Investors pursue two basic types of stock investments: growth stocks and value stocks. Growth stocks have high expectations of future earnings growth and therefore usually trade at higher PE ratios. Value stocks have lower share prices in relationship to their fundamental ratios and therefore trade at lower (bargain) PE ratios.

1) Calculate the price-earnings ratio and classify the stock as growth or value

Under Armour’s closing stock price was $29.05, the company reported net income of $257 and had 571 common shares outstanding.

Nike's net income was $4,240; common stock shares outstanding were 1,656.25. Their closing stock price was $52.99

Expert Solution

ekkarill92 answered 2 years ago

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