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Company Z is in the agriculture industry. A benchmark made up of all the stocks in...

Company Z is in the agriculture industry. A benchmark made up of all the stocks in that industry has a P/E ratio of 49. Company Z’s EPS were just reported to be $64/share.
Calculate company Z’s price per share.

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Answer #1

It is given in the question that Company Z is in the agriculture industry and the benchmark made up of all the stocks in that industry has a P/E ratio of 49. Company Z's EPS is $64/share. The basic formula used to calculate price per share is as follows :-

Price per share = P/E ratio * EPS

As company's P/E ratio is not given but the benchmark P/E ratio of that industry is provided, we will be using that value to calculate the price per share of Company Z.

Therefore, Price Per Share = 49 * 64

= $3,136

So, company Z price per share is $3,136.

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