Hi,
I am a little confused at how you have calculated the share price in example 1 in Chapter 4. I follow the rest of the workings okay- I just cannot seem to work back to the share prices you have given in the answer.
Any pointers would be great, thanks.
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Investor ratios
8y ago#1I have used the PE ratio. The PE ratio is the market value per share divided by the earnings per share.
Therefore the MV = PR ratio x EPs
In Year 1, the earnings per share are 5,100/9000.
Therefore the MV = 17.0 x 5,100/9,000 = $9.63
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