Company X is in the household goods industry. The stocks of companies in that industry have consistently had P/E ratios that have averaged 8.4. Company X most recently reported a net income of $42,000 and there were 55,500 shares of common stock outstanding. What would be the estimated value of Company X stock using this information?

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 54E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...
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Company X is in the household goods
industry. The stocks of companies in that
industry have consistently had P/E ratios
that have averaged 8.4. Company X most
recently reported a net income of $42,000
and there were 55,500 shares of common
stock outstanding.
What would be the estimated value of
Company X stock using this information?
Transcribed Image Text:Company X is in the household goods industry. The stocks of companies in that industry have consistently had P/E ratios that have averaged 8.4. Company X most recently reported a net income of $42,000 and there were 55,500 shares of common stock outstanding. What would be the estimated value of Company X stock using this information?
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