Solar energy Corp. had $4 million in earnings with 4 million shares outstanding. Investment bankers think the stock can justify a P/E ratio of 21. Assume the underwriting spreads is 5 percent. What should the price to the public be?

Solar energy Corp. had $4 million in earnings with 4 million shares outstanding. Investment bankers think the stock can justify a P/E ratio of 21. Assume the underwriting spreads is 5 percent. What should the price to the public be?

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

Solar energy Corp. had $4 million in earnings
with 4 million shares outstanding. Investment
bankers think the stock can justify a P/E ratio
of 21. Assume the underwriting spreads is 5
percent. What should the price to the public
be?

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