XYZ is a privately held firm whose forecasted earnings per share (EPS) are $5.63, and suppose...

XYZ is a privately held firm whose forecasted earnings per share (EPS) are $5.63, and suppose the average price/earnings (P/E) ratio for a set of similar publicly traded companies is 13.3. Estimate the intrinsic value of XYZ stock.

(Round your answer to the nearest 2 decimal points. For example, if your answer is $12.345, then enter 12.35 in the answer box.)

Expert Solution

The formula for calculating

Instrinsic value of stock = EPS x P/E Ratio

Putting the values given = 5.63 x 13.3

= $74.88

jeff jeffy answered 2 years ago

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