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The price earnings (P/E) ratio for BMI Berhad is 21, and the price to sales (P/S) ratio is 5.2. The industry P/E ratio is 35
The price earnings (P/E) ratio for BMI Berhad is 21, and the price to sales (P/S) ratio is 5.2. The industry P/E ratio is 35 and the industry P/S ratio is 7.5. Discuss whether BMI Corporation is undervalued or overvalued or fairly valued. Then, should we use price earnings multiple in making investment decisions? Explain your reasoning. (10 marks)
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