Use the following data for Nordstrom to estimate the values for a comparable department store, Macy’s.

Nordstrom:

a. Macy’s book value per share was $19.27. If Macy’s produces the same priceto-book ratio as Nordstrom, what is the value of Macy’s stock?

b. Macy’s earnings per share was $0.54. If Macy’s has the same price-toearnings ratio as Nordstrom, what is the value of Macy’s stock?

c. The actual price of Macy’s stock as of July 2018 was $36.54. What does this tell us about our valuation technique? What issues (if any) may be leading to any differences?

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Stock price per share (July 2022) Earnings per share (quarter ending July 2022) Book value per share (quarter ending July 2022) $23.50 $0.13 $3.67