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Author Question: In the price/earnings approach to stock valuation, (Read 22 times)

connormoss

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Question 1

Hallowell Inc. has free cash flow of $2.5 million and 1.25 million shares outstanding.  If you believe the price to cash flow ratio for this company should be 11, what is the highest price you should pay for the stock?
◦ $13.75
◦ $22.00
◦ $22.72
◦ $27.50

Question 2

In the price/earnings approach to stock valuation,
◦ historical stock prices are utilized.
◦ forecasted EPS are typically used.
◦ the P/E ratio is computed by multiplying the stock price by the earnings per share.
◦ the market P/E ratio, adjusted by beta, is used to value individual stocks.


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Marked as best answer by connormoss on Mar 29, 2022

miro2222

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connormoss

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Reply 2 on: Mar 29, 2022
Gracias!


bulacsom

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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