Use the given data for Nordstrom to estimate the values for a comparable department store, Macys.

Nordstrom:

Stock price per share (July 2018)	$50.71
Earnings per share (quarter ending July 2018)	$0.97
Book value per share (quarter ending July 2018)	$6.81

a. Macys book value per share was $19.27. If Macys has the same price-to-book value as Nordstrom, what is the value of Macys stock?

Value of Macy's stock: $

b. Macys earnings per share was $0.54. If Macys has the same price-to-earnings ratio as Nordstrom, what is the value of Macys stock?

Value of Macy's stock: $

c. The actual price of Macys stock as of July 2018 was $36.54.

What does this imply about the valuation techniques considered in this problem?

The price-to-book method yields a value within 25% of the actual value, whereas the price-to-earnings method yields a value that exceeds 25% of the actual value.

Both methods yield a value within 25% of the actual value.

The price-to-earnings method yields a value within 25% of the actual value, whereas the price-to-book method yields a value that exceeds 25% of the actual value.

Neither method yields a value within 25% of the actual value.