Question: A stock analyst uses multiples to value a stock. The stock has earnings per share of $4.00 share. The stock has sales revenue per share

A stock analyst uses "multiples" to value a stock.

The stock has earnings per share of $4.00 share.

The stock has sales revenue per share of $40/share.

The benchmark PE ratio is 18.

The analyst finds the same stock price using the price-sales ratio multiple as the analyst finds using the PE ratio multiple.

What is the benchmark price-sales ratio multiple the analyst used?

a)

10
b)

72
c)

1.8
d)

4.5

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