Suppose furniture manufacturer Bassett Furniture Industries, Inc., has earnings per share of ($2.00.) If the average P/E

Question:

Suppose furniture manufacturer Bassett Furniture Industries, Inc., has earnings per share of $$2.00.$ If the average P/E of comparable furniture stocks is 9.5, estimate a value for a share of Herman Miller stock using the P/E as a valuation multiple. What are the assumptions underlying this estimate?

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