Question
ANCAP Oil Co. stock has a PE ratio equal to 22, whereas VRC Oil has a PE ratio equal to 20. Both firms earnings per
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ANCAP Oil Co. stock has a PE ratio equal to 22, whereas VRC Oil has a PE ratio equal to 20. Both firms earnings per share are $1.12.
(1) Calculate both firms stock prices. ($24.64 and $22.40)
(2) Calculate the premium paid by investors to hold ANCAP Oil Co. shares instead of VRC Oil.
(3) Which company do investors think is a safer investment?
Please help with Part 2 and Part 3 including work.
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The Socionomic Theory Of Finance
Authors: Robert R. Prechter
1st Edition
0977611256, 978-0977611256
