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1. Company A's estimated EPS for the next twelve months (NTM) is $1.50. Its closest competitor, Company B, is trading at a P/E (NTM) of

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1. Company A's estimated EPS for the next twelve months (NTM) is $1.50. Its closest competitor, Company B, is trading at a P/E (NTM) of 22. Assume the companies have a similar operating and financial profile a. If Company A's stock were trading at S37.50, what would that indicate about its value relative to Company B? Explain. b. If we assume that Company A's stock should trade at about the same P/E as Company B's stock, what will we estimate as an appropriate price for Company A's stock

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