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P/E of stock A is 12.0, P/E of stock B is 10.0. The stock A is listed and the price per share is 100 USD.

  • P/E of stock A is 12.0, P/E of stock B is 10.0. The stock A is listed and the price per share is 100 USD. The stock B is not currently traded but the Company B is applying for listing at the New York Stock Exchange. You are the underwriter of this transaction and have to identify the fair value of stock B. Use the P/E of stock A to identify the fair value of stock B

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