Question: If a common share A with $5 par value is traded on the market at a price of $10 and the earnings per that share

If a common share A with $5 par value is traded

If a common share A with $5 par value is traded on the market at a price of $10 and the earnings per that share for the last year is $4. While a common share B with $2 par value is traded on the market at a price of $6 with earnings per share at $2. The average PE ratio of the sector of stock A is 4 and for Stock B is 5. 1) Calculate the Price/Earnings ratio for: Stock A: Stock B: 2) Calculate the fair market price of: Stock A: Stock B

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Please help solve problem 10-21? I need to know detailed solutions for parts a,b,c,and d. 2011 5.31 The its t current interest rate on new debt is 9%; Foust's marginal tax rate is 40%; and capital...

Computer CALCULATING THE WACC Here is the condensed 2016 balance sheet for Skye Company (in thousands of dollars): 0-21 2016 Current assets Net fixed assets Total assets $2,000 3,000 $%5,000 Accounts...

Ecounting for Corporate Entities(1) estion 4 ot yet swered On January 1, 2020. Lion Company purchased 100% of the common stock of Tiger Company by issuing 50,000 shares of its (Lion) OMR 5 par value...

On January 1, 2020, Lion Company purchased 100% of the common stock of Tiger Company by issuing 50,000 shares of its (Lion) OMR 5 par value Common stock with a market price of OMR 12.50 Per share....

1- Suppose that a company that has a 10.000 TL amount of capital (par value is 1 TL per share) distributed 10 TL dividends per share last year end. The discount rate for this particular company's...

Corresponds to CLO 1(a) West Coast Corporation had 800,000 shares of common stock outstanding on January 1, issued 200,000 shares on October 1, and had income applicable to common stock of $2,865,000...

I: Multiple Choice 1. On January 1, 2009, Dermot Company purchased 15% of the voting common stock of Horne Corp. On January 1, 2011, Dermot purchased 28% of Horne's voting common stock. If Dermot...

1. Corresponds to CLO 1(a) West Coast Corporation had 800,000 shares of common stock outstanding on January 1, issued 200,000 shares on October 1, and had income applicable to common stock of...

Here is the condensed 2021 balance sheet for Skye Computer Company (in thousands of dollars) Skye's earnings per share last year were $3.40. The common stock sells for $60.00, last year's dividend (D...

Here is the condensed 2021 belance sheet for Skye Cumiputer Company (in thousands of dollars): Current assets Net fixed assets Total assets 2021 $1,750 3,250 $5,000 Accounts payable and accruals $...

How would the following transactions be recorded in the IMF balance of payments? (a) Dell in the United States has sold an $8 million computer to an insurance company in Singapore and has been paid...

In what ways is the Yellow Book consistent with generally accepted auditing standards, and what are some additions and modifications?

2. (True/False): The starting cluster number of a file is stored in the disk parameter table.

2. What might be the response of the paralegal assistants to this change?

3. What might be the response of the attorneys to this change?

4. If you were Paul, what problems would you anticipate at this point?