a. What stock price would you consider appropriate? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What if the benchmark PE were 16? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

a. What stock price would you consider appropriate? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What if the benchmark PE were 16? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

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The Dahlia Flower Company has earnings of $2.00 per share. The benchmark PE for
the company is 13.
a. What stock price would you consider appropriate? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. What if the benchmark PE were 16? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
a. Stock price at a PE of 13
b. Stock price at a PE of 16
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