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Stock selling on the market

Assume that two companies in the same industry have equal earnings. Why might these companies have different price-earnings ratios? If a company has a price-earnings ratio of 20 and reports earnings per share for the current year of $4, at what price would you expect to find the stock selling on the market?

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Stock selling on the market

Reference No:- TGS0676896

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Difference between current assets and current liabilities

Q : Find the expected return on asset based on capm

Q : Determin net present value of this investment alternatives

Q : Company earnings per share on common stock

Q : Stock selling on the market

Q : Cost of the equipment

Q : What net annual cash inflow must the store generate

Q : How process of virus and computer vulnerabilities work

Q : Prepare an income statement

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Stock selling on the market

Reference No:- TGS0676896

Recent Questions Asked Finance Basics

Q : Difference between current assets and current liabilities

Q : Find the expected return on asset based on capm

Q : Determin net present value of this investment alternatives

Q : Company earnings per share on common stock

Q : Stock selling on the market

Q : Cost of the equipment

Q : What net annual cash inflow must the store generate

Q : How process of virus and computer vulnerabilities work

Q : Prepare an income statement

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