Mag Corporation has a earnings per share of 2.30 and it is trading at 22.50 per share. Base on the PE ratio of the S & P Index of 25, what should the price per share be theoretically? Please show formula, and how it is computed?
Price= Earnings per share * PE ratio of the S & P Index
=$51.75 per share= Answer
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This provides the steps to calculate the price per share