Pham Co. is a privately held company with 1,550,000 common shares outstanding. It also has 450,000 preferred shares outstanding with an annual dividend rate of $3.75 per share. Dividends on these preferred shares were paid during the year, along with a dividend of $1.35 per share on the common shares. The company recently reported net income of $5,785,600 for the year. The investigation has discovered three
comparable companies that reported the following:

• Comparable 1 — Current share price $145.00; EPS $11.93
• Comparable 2 — Current share price $85.00; EPS $7.50
• Comparable 3 — Current share price $64.50; EPS $5.66

What is the estimated price per common share of Pham?

Answer rating: 100% (QA)

To estimate the price per common share of Pham Co we can use the pricetoearnings PE ratio approach T... View the full answer