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The Sleeping Flower Co. has earnings of $1.52 per share.

Requirement 1:
If the benchmark PE for the company is 17, how much will you pay for the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Current stock price $
Requirement 2:
If the benchmark PE for the company is 20, how much will you pay for the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Current stock price

Respuesta :

Answer:

1. $25.84

2. $30.4

Explanation:

We know that

1. Price-earnings ratio = (Market price per share) ÷ (Earning per share)

17 = market price per share ÷ $1.52

So, the market price per share = $25.84                 ($1.52 × 17)

2. Price-earnings ratio = (Market price per share) ÷ (Earning per share)

20 = market price per share ÷ $1.52

So, the market price per share = $30.4               ($1.52 × 20)

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