Price earnings ratio valuationpe ratio is traditionally, Ask an Expert

Finance

Price Earnings Ratio Valuation

P/E ratio is traditionally employed for valuation of shares however it is an important ratio in the valuation of business. The P/E ratio is the measure of how many years earning would 'purchase' the market value of the business and is given via as:

P/E ratio = MV/E

MV = P/E x E

NB: The value of the business can be calculated with taking estimated earnings x P/E ratio.

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9520201

Have any Question?Write your Review or question?

Related Questions in Basic Finance

Brenda wants to invest in a bank cd that will pay her 626

Brenda wants to invest in a bank CD that will pay her 6.26 percent compounded quarterly. How many years will it take to triple her initial investment?

Problem financial planningfinancial forecasting - use the

PROBLEM: FINANCIAL PLANNING Financial Forecasting - Use the percent of sales methods to prepare pro forma income statement for Calico Sales Co., Inc. projected sales for next year is P 4million. Cost of Goods sold is exp ...

What are some key factors needed for consideration in

What are some key factors needed for consideration in choosing a business location and why is location a key finance factor for most businesses?

Assuming interest and dividends are paid annually calculate

Assuming interest and dividends are paid annually, calculate the annual holding period return on each security. Round answer to 1 decimal place. Stock 1: beginning of year price 44.00, end of year price 48.25, interest/d ...

1 the consultants estimated the required rate of return was

1. The consultants estimated the required rate of return was 13.635% 2. The Beta of Poorside's equity was 0.7, the market return was 20% and the risk-free rate was 12% 3. The interest rate on debentures was 13% per annum ...

The inside door has total debt of 76662 total equity of

The Inside Door has total debt of $76662, total equity of $224477, and a return on equity of 12.7 percent. What is the return on assets? Input your answer as a decimal rounded to 4 places (i.e., 1% = 0.0100).

A new computer system will require an initial outlay of

A new computer system will require an initial outlay of $19,000, but it will increase the firm's cash flows by $3,800 a year for each of the next 8 years. a. Calculate the NPV and decide if the system is worth installin ...

Question - your chief financial officer cfo was unable to

Question - Your chief financial officer (CFO) was unable to attend the recent monthly chamber of commerce meeting. You learned from some other local CFOs that changing exchange rates had dramatically affected their firms ...

Question - payday loans are very short-term loans that

Question - Payday loans are very short-term loans that charge very high interest rates. You can borrow $500 today and repay $550 in two weeks. What is the compound annual rate implied by this 10 percent rate charged for ...

What is the difference between earnings per share and pe

What is the difference between Earnings per Share and P/E ratio? What do they measure?

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert