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3 Assume two companies in the same industry have equal earnings. Why might these companies have different price - earnings ratios? If a company has

3

Assume two companies in the same industry have equal earnings. Why might these companies have different price

-

earnings ratios? If a company has a price

-

earnings ratio of

20

and reports earnings per share for the current year of $

4,

what is its market price per share?

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