Question
8. You are deciding whether to invest in Goldmine, Inc, a national mining company. You observe the Price to Earnings ratio of the following companies.
8. You are deciding whether to invest in Goldmine, Inc, a national mining company. You observe the Price to Earnings ratio of the following companies.
| Company | P/E Ratio |
| Nucor Copper Mining | 23.9 |
| Gem Razor and Shave Cream Company | 16.9 |
| Forensic Silver Mining | 24.1 |
| Geld Mining Company | 24.0 |
| Lavoris Household Goods | 17.1 |
| JP Mushing Investments | 19.0 |
Goldmine has earnings of $90 million and has 15 million shares outstanding. It currently trades at $114/share in the market. Respond to two questions:
- Should you buy Goldmine and why?
- If the data in the table above remains unchanged over time, what price approximately (to the nearest dollar) do you expect Goldmine eventually to rise or fall to?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Build An Online Retail System For Under $150
Authors: Roger Butterworth
1st Edition
1530170044, 978-1530170043
