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Homework answers / question archive / The current price of ABC Corporation stock is $26
The current price of ABC Corporation stock is $26.50 per share. Tomorrow the company will announce that next year's earning are expected to be $3 per share. The expected P/E multiple is 15 times. What price would you expect for ABC stock after the earning's news?
Answer:
Price after news = 45.00
Step-by-step explanation
Price after news = Earnings per share * PE multiple
Price after news = 3.00*15
Price after news = 45.00
