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Price-to-Earnings (P/E) Ratio

Price earnings ratio

The company Glamour plc. has undertaken an investment of £1,000,000 from which it expects earnings of £50,000 next year, growing at 10% annually. Moreover, the company depreciates 5% of its capital each year and requires total capital expenditure (replacement expenditure and net new investment) of 8%. Company Value has the sam

4 Questions

A. Use a regression to estimate Industry P/E ratios while controlling for risk, growth and payout. Choose and justify your choice of which P/E ratio you estimate. Do you recommend manipulating this data in any way prior to your estimation? b. Your boss, the research director, wants his analysts to concentrate on companies

P/E Ratios

Castor Corp. and Pollux Corp. each have 100 million shares and earnings per share of $2. Castor has a P/E ratio of 20, while Pollux has a P/E ratio of 15. Castor makes an offer to acquire Pollux, offering .80 shares of Castor for each share of Pollux; the offer is accepted by Pollux shareholders. Suppose that the combined firm (

Stock Price

46. The company has been hit hard due to increased competition. The co.'s analysts predict that earnings (and dividends) will decline at a rate of 5% annually forever. Assume that ks = 11% and Do = $2. What will be the price of the co's stock 3 year from now? 27.17 6.23 28.50 11.88 20.63