The average price-earnings ratio of the small firms in the textile industry is 12.50. On the other hand, Epsilon Fabrics Inc. has annual sales of P4,000,000, a cost ratio of 65%, a sales margin of 12%, and 500,000 ordinary shares outstanding valued at P11.50. Using peer average comparison, a share of Epsilon is over or undervalued by how much?

Answer rating: 100% (QA)

A share of Epsilon is undervalued by P050 explanation The average priceearnings ratio of the small f... View the full answer