Need help with this question solution accounting Using the P/E multiples approach tovaluation, what is the estimated price of astock if the firm's P/E ratio is 18.2 and itsearnings are $452,000? Assume that thereare 100,000 shares of stock outstanding.

Step 1: Define Price Earnings RatioThe price earnings ratio multiple is a method to value companies…

Answered: Using the P/E multiples approach to…

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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Using the P/E multiples approach to valuation, what is the estimated price of a stock if the firm's P/E ratio is 18.2 and its earnings are $452,000? Assume that there are 100,000 shares of stock outstanding.