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
Related questions
Question
100%
The company recorded the following indicated earnings per share (EPS) in the last five years
|
YEAR |
EPS |
|
1 |
10 |
|
2 |
8 |
|
3 |
15 |
|
4 |
16 |
|
5 |
20 |
You also have data on other similar companies in the real estate sector which are already listed at the local stock exchange
|
Comparable Firm |
Market Price Per share (MPS) |
Earnings Per Share (EPS) |
|
A |
15 |
10 |
|
B |
100 |
60 |
|
C |
50 |
60 |
|
D |
30 |
25 |
Extracts from the books of the company reveal the following
|
Ordinary Share Capital (Sh. 1.5 Par value) |
Sh. 300 Million |
|
Borrowings |
Sh. 75 Million |
Required:
Estimate the price per share for the company. Clearly state the assumptions taken into consideration in your analysis and computation
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