Titan Ltd is considering listing on the local stock exchange. Their industry classification will be “Transport and Storage”. The average price earnings ratio for this sector is 16. You are reviewing the company and plan to calculate an expected price earnings ratio using expected price and expected earnings. The company’s expected earnings per share is $3.10 and they expect to maintain a dividend payout ratio of 40%. Assume the expected price for Titan is $12.50. What is the expected P/E ratio? And what conclusion can you draw from it? 

Answer rating: 100% (QA)

The expected P E ratio is calculated by dividing the expected price pe... View the full answer