Question: Please help with the following problem with clear explanations! We have a stock which has a P/E of 12. It has 1 million outstanding shares

Please help with the following problem with clear explanations!

We have a stock which has a P/E of 12. It has 1 million outstanding shares and the equity is $2 million. Its net profit margin, financial leverage and ATO are .07, 1.3 and 1.6 respectively. Derive the price for next year. What are 4 important variables that affect P/E ratios?

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