Question
Company As estimated EPS for the next twelve months (NTM) is $1.50. Its closest competitor, Company B, is trading at a P/E (NTM) of 22.
Company As estimated EPS for the next twelve months (NTM) is $1.50. Its closest competitor, Company B, is trading at a P/E (NTM) of 22. Assume the companies have a similar operating and financial profile.
If we assume that Company As stock should trade at about the same P/E as Company B's stock, what will we estimate as an appropriate price for Company As stock?
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Managerial Accounting
Authors: John Wild, Ken Shaw
5th edition
978-1259176494, 1259176495, 978-1259347641, 1259347648, 978-0078025600
