Question

In: Finance

On a particular date, a company has a stock price of $24.17 and an EPS of...

On a particular date, a company has a stock price of $24.17 and an EPS of $ 2.89. Its competitor had a stock price of $20.57. What would be the expected EPS of their competitor's stock on this date, if estimated using the method of comparables?
A. 1.36
B. 4.77
C. 3.60
D. 2.46

Solutions

Expert Solution

PE ratio = 24.17/2.89 = $8.36

EPS of competitors stock = 20.57/8.36

EPS = $2.46

So,

Earning per Share = $2.46


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