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1. P/E ratio Consider companies A and B in automobile industry. A's current stock price is $80 per share. Its latest net income is $30

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1. P/E ratio Consider companies A and B in automobile industry. A's current stock price is $80 per share. Its latest net income is $30 million, and the company has 1.5 million shares outstanding. (a) What is the price-earnings ratio of company A ? (b) Company B's latest earnings is $10 per share. What would be the B's share price? We may assume that A and B have the same P/E ratios because they belong to the same industry

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