A6 Valuation Using the PE Multiple Nokia Corp. recently traded at $5.29 per share. At that time, earnings per share estimates for the next 12 months were $0.28. In addition, Motorola Solutions Inc. and Ericsson had forward PE ratios of 21.37 and 2 1.67, respectively. Required a. Using Motorola Solutions and Ericsson as comparables, estimate the intrinsic value of Nokia's equity per share. b. Does the estimate in part a suggest that Nokia is undervalued or overvalued?

A6 Valuation Using the PE Multiple Nokia Corp. recently traded at $5.29 per share. At that time, earnings per share estimates for the next 12 months were $0.28. In addition, Motorola Solutions Inc. and Ericsson had forward PE ratios of 21.37 and 2 1.67, respectively. Required a. Using Motorola Solutions and Ericsson as comparables, estimate the intrinsic value of Nokia's equity per share. b. Does the estimate in part a suggest that Nokia is undervalued or overvalued?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 99.4C

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