Question
A company's 12-month trailing earnings per share [EPS] are $4.50,and the EPS are expected to grow 10% annually. If an investor is willing to paya
A company's 12-month trailing earnings per share [EPS] are $4.50,and the EPS are expected to grow 10% annually. If an investor is willing to paya P/E multiple that is no higher than 2.5 times its growth rate, and the stockis currently selling at $100 per share, would this be an acceptable purchaseprice? Explain and support your answer with numbers.
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Case Studies in Finance Managing for Corporate Value Creation
Authors: Robert F. Bruner, Kenneth Eades, Michael Schill
7th edition
007786171X, 77861711, 978-0077861711
