KO Co. has the sales of $37,266 million, net income of $8,920 million, and the book...

KO Co. has the sales of $37,266 million, net income of $8,920 million, and the book equity of $18,981 million. It has 4,300 million shares outstanding. The industry average P/E ratio is 23.82, Price/Book ratio is 4.72, and Price/Sales ratio is 3.42. What is the expected price of KO Stock using the P/E ratio?

		$49.41
		$50.85
		$20.83
		$29.64

Expert Solution

EPS=Net income/shares outstanding

=$8,920 million/4300 million shares outstanding

=$2.0744186

P/E ratio=stock price/EPS

Hence expected price =2.0744186*23.82

=$49.41(Approx)

jeff jeffy answered 3 years ago

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