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wariber [46]
4 years ago
13

Foraker Products is a manufacturer and distributor numerous food products. The company recently reported earnings per share of $

6.60. Based on its recent price of $122.76, the company has a PE ratio of 18.6. Foraker Products is part of the food processing industry which has an industry PE ratio of 19.75. Using industry information, estimate the intrinsic value of Foraker Products’ earnings per share?
Business
1 answer:
ruslelena [56]4 years ago
8 0

Answer:

$130.35

Explanation:

Given the information in indistry, we have:

  • PE = 19.75
  • Share price reported:  $6.6

As we know the price earning (P/E) ratio can be used to determine the price of a stock with the following formula

Price = EPS × P/E ratio

=> The intrinsic value = 19.75 × 6.6 = $130.35

(It is suitable to find the intrinsic value when using  the industry average price-earning ratio)

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Ferrari is well known as a brand of luxury sports cars; accordingly, it has leveraged its brand name to introduce clothing offer
Pepsi [2]

Answer:

brand dilution

Explanation:

According to the information in the question above, it is correct to say that Ferrari may run the risk of diluting the brand, which occurs when a brand has a very strong product, as in the case of Ferrari, which is a brand recognized for its luxury cars , and betting on a licensing strategy can lead to a loss of value because other product lines do not meet the quality and value standards perceived by consumers.

3 0
3 years ago
Why do basketball players switch teams?<br> Why do they have to sign a paper when they do that?
Anika [276]

It varies from player to player, some do it for better pay and some do it because they don't like the team their with. They have to sign papers because there transferring their services to another franchise, and are agreeing to new terms of contracts. Things that are disclosed in the contracts are things such as payment and how many years they will be bonded by the contract.

6 0
3 years ago
On december 1, 2016, escobar consulting, which uses a calendar year as its fiscal year, signs a $4,000, 12%, four-month note pay
loris [4]
The journal entry to record the payment of the note and entire interest on april 1, 2017 is as follows; Debit Notes Payable $4,000, Debit Interest Expense 120, Debit Interest Payable 40, <span>Credit Cash $4,160.

April 1,2017
       Notes payable     $4,000
       Interest expense    $120
       Interest payable       $40
                       Cash                  $4,160</span>
7 0
3 years ago
You are bullish on Telecom stock. The current market price is $50 per share, and you have $5,000 of your own to invest. You borr
Olenka [21]

Answer:

12%

Explanation:

Initial investment =$5,000.00

Value of stock with 10%=$10,000*(1+10%)=$11,000

The amount repayable to the broker after one year is the amount borrowed plus interest of 8%

Amount borrowed plus interest= $5,000+( $5,000 *8%)

Amount borrowed plus interest=$5,400

Rate of return=(Value of stock with 10%-Amount borrowed plus interest-equity fund)/amount borrowed

Rate of return=($11,000-$5,400-$5000)/$5,000=12%

6 0
3 years ago
Consider the following: Cash in Bank - checking account of $13,500, Cash on hand of $500, Post-dated checks received totaling $3
borishaifa [10]

Answer:

b. $ 14,000

Explanation:

In the cash section of balance sheet, it includes cash on hand, cash in check accounts and normal deposit with term lower than 3 months.

Thus in this case, the cash should be reported in the statement = Cash in Bank - checking account of $13,500 + Cash on hand of $500 = $14,000

Post-dated checks received totaling $3,500 is a check on which the issuer has stated a date later than the current date, so it is not reported in current position

Certificates of deposit totaling$124,000 is reported in investment (short term or long term subject to the tenor of deposit)

7 0
3 years ago
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