The following table supplies data on earnings per share (EPS), book value per share (BVPS), and...

 

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The following table supplies data on earnings per share (EPS), book value per share (BVPS), and the Beta Inc.'s return on equity (ROE). Beta Inc.'s current stock price is $32.0 per share. EPS, BVPS and ROE of Beta Inc. (currency in S) 2006 2007 2008 2009 2010 2011 2012 EPS 0.84 0.68 0.69 0.70 1.05 0.82 1.12 BVPS 3.00 2.80 2.65 2.99 3.90 3.72 4.03 ROE 28.0% 24.3% 26.0% 23.4% 26.9% 22.0% 27.8% a) (3 points) Calculate a normalized EPS for Beta Inc. by the method of historical average EPS and then calculate the P/E based on that estimate of normalized EPS. (3 points) Calculate a normalized EPS for Beta Inc. by the method of average ROE and the P/E based on that estimate of normalized EPS. The following table supplies data on earnings per share (EPS), book value per share (BVPS), and the Beta Inc.'s return on equity (ROE). Beta Inc.'s current stock price is $32.0 per share. EPS, BVPS and ROE of Beta Inc. (currency in S) 2006 2007 2008 2009 2010 2011 2012 EPS 0.84 0.68 0.69 0.70 1.05 0.82 1.12 BVPS 3.00 2.80 2.65 2.99 3.90 3.72 4.03 ROE 28.0% 24.3% 26.0% 23.4% 26.9% 22.0% 27.8% a) (3 points) Calculate a normalized EPS for Beta Inc. by the method of historical average EPS and then calculate the P/E based on that estimate of normalized EPS. (3 points) Calculate a normalized EPS for Beta Inc. by the method of average ROE and the P/E based on that estimate of normalized EPS.

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