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List of competitors for Bank of Queensland (BoQ) Company Ticker Price per share ($) Earnings per share ($) Book Value per share ($) ANZ Bank ANZ 28
List of competitors for Bank of Queensland (BoQ) Company Ticker Price per share ($) Earnings per share ($) Book Value per share ($) ANZ Bank ANZ 28.92 2.23 20.41 Commonwealth Bank CBA 73.84 5.55 37.45 National Australia Bank NAB 27.84 1.88 18.94 Westpac Bank WBC 29.22 2.36 18.44 Assuming that Bank of Queensland (BOC) has an EPS of $0.90, based upon the average P/E ratio for its competitors, Bank of Queensland's stock price is closest to: 3. $40 b.$30 O4510 d. $20 0.535
Expert Solution
Solution:
First we should calculate the P/E ratio of each competitors as follow;
P/E ratio=market Price/EPS
ANZ=$28.92/2.23
=12.96861
CBA=$73.84/5.54
=13.32852
NAB=$27.84/1.88
=14.80851
WBC=$29.22/2.36
=12.38136
Average P/E ratio is;
=(12.96861+13.32852+14.80851+12.38136)/4
=13.37175
Now,using the formula of P/E ratio,we can find the price of the stock as follow:
P/E ratio=Price/EPS
13.37175=Price/$0.90
Price=$0.90*13.37175
=$12.03
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