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blueheeter1461
07.07.2021 •
Business
Shoe Barn Inc. is a privately owned firm with few investors. Investors forecast their earnings per share (EPS) to reach $2 this coming year. The average price-to-earnings (P/E) ratio for similar companies in the S&P 500 is 12. What will the estimated intrinsic value of the Shoe Barn Inc.'s stock?
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Ответ:
$24
Explanation:
Calculation to determine What will the estimated intrinsic value of the Shoe Barn Inc.'s stock
Using this formula
Estimated intrinsic value = Earnings * P/E Ratio for the industry
Where,
EPS = $2
Industry P/E = 12
Let plug in the formula
Estimated intrinsic value= $2 * 12
Estimated intrinsic value= $24
Therefore the estimated intrinsic value of the Shoe Barn Inc.'s stock is $24
Ответ: