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John Moffat.
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Noah098
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“Cigno Co has estimated that Anatra Co’s manufacturing business should be valued at a factor of 1.2 times higher than the industry’s average price-to- earnings ratio. ”
sir don’t you think there is a flaw in this sentence? it says that 120% higher than average PE which means its effectively 220% of a average PE. so if avg PE is 8, antara’s unit MV should be 8×2.2=17.6?
John Moffat
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Yes, the word “higher” should not have been there. For that reason markers would have been instructed to still give the marks if it had been interpreted the way that you have.
Noah098
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