Question

The Blooming Flower Co. has earnings of $1.48 per share. a. If the benchmark PE for the company is 15, how much will you pay for the stock?

Answer 1

Answer:

$22.20

Explanation:

Using the equation to calculate the price of a share of stock with the PE ratio:

P = Benchmark PE ratio * EPS  

So, with a PE ratio of 15  

P = 15*($1.48)

P = $22.20