TargetCo has earnings per share of $3.90, 1.2 million shares, and a price per share of $38.10. If companies in the same industry as TargetCo are trading at multiples of 16 times earnings, what would be one estimate of an appropriate premium for TargetCo? One estimate of an appropriate premium for TargetCo is%. (Rrounded to one decimal place.)
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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