Using the chart below, compute the VRE ratio for each company and use it to determine which firm(s) might interest a value investor:
ROE Price EPS
Company A 15% $60 $3.00
Company B 20% $30 $2.00
Company C 12% $15 $1.50
1- Using the above information, calculate the VRE for Company A.
2- Using the above information, calculate the VRE for Company B.
3- Based on the VRE calculations, which firm(s) would be attractive to a value investor? Select one or more:
· Company A
· Company B
· Company C
· Both Company B and Company C.