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If EPS of Company A is 5 and EPS of company B is 10 and if company A is trading at 19 PE what PE should company B Trade at

Answer» TRADING value of B = 38 PEExplanation:The FORMULA that we will be USING in the given question is of price to EARNINGS ratio. This can be written as;Price to Earnings Ratio = Market Price per Share / Earnings per ShareNow as per given share, let us find the P/E ratio for company A;P/E = 19 / 5 = 3.8Now keeping the P/E same for B, we can can calculate the trading value of B3.8 = Trading value of B / 10 Trading value of B = 38 PE


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