Jim Boo, CFA, is analyzing Justin Corp., a maker of home appliances. Boo's research provides the following facts:
Calculate Justin's expected price to earnings ratio (/).
Click on the arrows to vote for the correct answer
A. B. C.A
To calculate Justin Corp.'s expected price to earnings ratio (P/E ratio), we need two pieces of information: the expected price of the company's stock and the expected earnings per share (EPS).
The P/E ratio is calculated by dividing the price of the stock by its earnings per share. It is a commonly used valuation metric that provides insights into the market's expectations for a company's future earnings growth.
Unfortunately, the question does not provide us with the expected price of Justin Corp.'s stock or the expected earnings per share. Therefore, we cannot calculate the exact P/E ratio.
The answer choices provided in the question are A. 8.0x, B. 10.0x, and C. 12.0x. Since we do not have the necessary information, we cannot determine which answer choice is correct. Without the expected price and EPS figures, it is not possible to calculate the P/E ratio accurately.
It is important to note that this is a hypothetical question from an exam, and the lack of information may be intentional to test your understanding of the concepts or to assess your ability to identify missing data. In real-world scenarios, analysts would gather detailed information on a company's expected price and earnings to calculate the P/E ratio accurately.