You have two stocks from which to pick. The first stock has a current stock price of

Question:

You have two stocks from which to pick. The first stock has a current stock price of $40 and earnings per share of $3.33. The second stock has a current stock price of $33.50 and earnings per share of $4.01. Both firms are in the media industry, and the average P/E ratio for the industry is 12. Use the P/E ratio to determine which stock you expect to have higher earnings.

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...