The Sleeping Flower Co. has earnings of $1.66 per share. 1. If the benchmark PE for thecompany is 23, how much will you pay for the stock? (Do not round intermediate calculations.Round the answer to 2 decimal places.) 2. If the benchmark PE for the company is 26, howmuch will you pay for the stock? (Do not round intermediate calculations. Round the answerto 2 decimal places.) The market price of one share of stock is $43.00 and the firm's earningsper share of stock is $2.62. Calculate the price-earnings ratio for the firm.

3. Calculate the price-earnings (P/E) ratio for the firm. The P/E ratio is calculated using the…

Answered: The Sleeping Flower Co. has earnings of…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 2MAD

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The Blooming Flower Co. has earnings of $1.63 per share. a. If the benchmark PE for the company is 22, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If the benchmark PE for the company is 25, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Stock price b. Stock price
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