You are estimating the price-earnings multiple to use to value Paramount Corporation by looking at the average

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You are estimating the price-earnings multiple to use to value Paramount Corporation by looking at the average price-earnings multiple of comparable firms. The following are the price-earnings ratios of firms in the entertainment business.

a. What is the average PE ratio?

b. Would you use all the comparable firms in calculating the average? Why or why not?

c. What assumptions are you making when you use the industry-average PE ratio to value Paramount Corporation?

Related Book For answer-question

Essentials of Business Statistics Communicating With Numbers

ISBN: 978-0078020544

1st edition

Authors: Sanjiv Jaggia, Alison Kelly

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Posted Date: Mar 03, 2022 12:33 AM

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You are estimating the price-earnings multiple to use to value Paramount Corporation by looking at the average

Question:

Expert Answer:

A Average PE Ratio 220936141026704 247225 B Yes All the companies should be included in the c... View the full answer

Essentials of Business Statistics Communicating With Numbers

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