Valuation Using Price-Earnings Multiples

The La Verne Company is planning an initial public offering (IPO) and management would like to have an idea of an appropriate price to charge for a share of its stock. The company plans to issue 250,000 shares. The La Verne Companys most recent earnings per share (EPS) are $3.00; however, the consensus forecast among analysts who follow the company is for EPS to be $3.25. The EPS and share price of four comparable firms are shown below:

Firm	EPS	Share Price	P/E Ratio
W	$ 1.50	$ 21.00	14
X	0.75	9.00	12
Y	12.00	96.00	8
Z	6.00	162.00	27

Compute the value of a share of La Verne Company stock using the price-earnings multiples method. Round answers to two decimal places