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Question attention to the news that Dongguk Corp. may report an earnings surprise thanks to the booming demand for netural gas p pe as50ciated with
Question attention to the news that Dongguk Corp. may report an earnings surprise thanks to the booming demand for netural gas p pe as50ciated with rising shale gas production judgement through a price multiple comparison method, Mr Kim chooses to deploy PER (Price-Earnings Ratic) computed PER= per share stock price of Dengguk Corp. (November 1, 2019) /expeced per share ret income for the fiscal year of 2019 For comparison purpose, Mr. Kim selects 5 firms that belong to the same Dongguk Corp, that average PER us ng above formula, A3 a resuit, Mr. Kim gets a multiple of 15 for Dongguk Corp, whereas the average multipie tnose five firms is 12. Based on this mu tiple comparison, stock market everprices the shares of Dergguk Corp. and gives up investment Dongguk Corp. shares. Requirement 1 If you are a financial analvst. investment advice to Mr. Daniel Kim? (12 points) Requirement 2: The method of price multiple comparison, as expla.ned above. has implementatior problems as well as concep:ual problems. Incicate onc cach
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