You notice that Coca-Cola has a stock price of $ 40.68 and EPS of $ 2.04. Its competitor PepsiCo has EPS of $ 3.43. But, Jones

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3 years ago

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You notice that Coca-Cola has a stock price of $ 40.68 and EPS of $ 2.04. Its competitor PepsiCo has EPS of $ 3.43. But, Jones

Soda, a small batch Seattle-based soda producer has a P/E ratio of 35.2. Based on this information, what is one estimate of the value of a share of PepsiCo stock? g

Business

1 answer:

Finger [1] · Answer 1 · 2022-04-23T15:55:38+03:00

Answer:

Estimate Value of a share= $71.81

Explanation:

<em>The value of a share can be determined using the price earning ratio model. According to this model, the price of a share is estimated as the EPS of the company multiplied by a representative P/E ratio.</em>

Value of share = EPS × P/E

The appropriate P/E ratio would be that of a similar operator in the same industry, in this case , Jones Soda.

Hence the estimate value of share =2.04 × 35.2=71.81

Estimate Value of a share= $71.81

You notice that​ Coca-Cola has a stock price of $ 40.68 and EPS of $ 2.04. Its competitor PepsiCo has EPS of $ 3.43. ​But, Jones

You notice that Coca-Cola has a stock price of $ 40.68 and EPS of $ 2.04. Its competitor PepsiCo has EPS of $ 3.43. But, Jones