Question
The earnings per share of Subsidies-Forever-And-Ever (SFAE), a wind energy producer, are $5. The median P/E ratio in the wind energy sector (excluding SFAE) is
The earnings per share of Subsidies-Forever-And-Ever (SFAE), a wind energy producer, are $5. The median P/E ratio in the wind energy sector (excluding SFAE) is 44.
1)If SFAE has 100,000 shares outstanding, estimate the value of its equity.
2) How would the P/E ratio in the wind energy sector change (increase, decrease, or stay the same) if the risk-free rate decreased?
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N Hyman
8th Edition
0324259700, 978-0324259704
