(Solution) If The P/E Ratio Of A Company's Common Stock Were 12, And Its Earnings Were $ 2.50 Per Common Share: A) The Market Value Of The Common Stock Would... | Snapessays.com


(Solution) If the P/E ratio of a company's common stock were 12, and its earnings were $ 2.50 per common share: A) the market value of the common stock would...


21. If the P/E ratio of a company's common stock were 12, and

 

 

its earnings were $ 2.50 per common share:

 

 

A) the market value of the common stock would be $20.83 per share.

 

 

B) the market value of the common stock would be $25.00 per share.

 

 

C) an increase in earnings of $0.20 per share, with no

 

 

change in the multiple, would result in a market price increase of

 

 

$2.40 per share.

 

 

D) an increase in earnings of $0.20 per share, with no

 

 

change in the multiple, would result in a market price increase of

 

 

$1.67 per share.

 


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This question was answered on: May 23, 2022

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