An oil company's P/E ratio is 15; its projected EPS is $8; and its price is $120.Expectations are that a new field will add $2 EPS the next year.If the P/E remains constant,what should happen to the price in an efficient market? How soon? Are investors that pay the price after adjustment paying a fair price and are they expected to earn a normal return?

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The Answer of An oil company's P/E ratio is 15; its projected EPS is $8; and its price is $120.Expectations are that a new field will add $2 EPS the next year.If the P/E remains constant,what should happen to the price in an efficient market? How soon? Are investors that pay the price after adjustment paying a fair price and are they expected to earn a normal return?

An Oil Company's P/E Ratio Is 15; Its Projected EPS