The La Verne Company is planning an initial public offering  (IPO) and management would like to have an idea of an appropriate price to charge for a share of its stock. seen The company plans to issue 250,000 shares. The La Verne Company’s most recent earnings per share (EPS)  are \($3.00;\) however, the consensus forecast among analysts who follow the company is for EPS to be \($3.25.\) The EPS and share price of four comparable firms are shown below:

Compute the value of a share of La Verne Company stock using the price-earnings multiples method.

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Firm W MX Y N EPS Share Price P/E ratio $ 1.50 $22.50 15 0.75 9.00 12 12.00 108.00 9 6.00 144.00 24