Question

Asked Nov 3, 2019

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Using the P/E multiples approach to valuation, What is the estimated price of a stock if the firm’s P/E ratio is 18.2 and it’s earnings are $452,000? Assume that there are 100,000 shares of stock outstanding.

Step 1

**Calculation of estimated price of stock:**

**Answer:**

Expected price of stock is** $82.26**

Step 2

**Calculation of EPS:**

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