A stock analyst is trying to calculate a fair value of XYZ company’s common stock by using the following information. What would be the fair value of this company’s common stock? Industry average P/E ratio = 3.45 times and Earnings per share of XYZ company is $5.0.

Answer rating: 100% (QA)

We know that Price Earnings ratio or PE Ratio is calculated as follows P E Ratio Fair val... View the full answer