You expect Whirlpool Corporation (WHR)to have earnings per share of $6.10 over the coming year.If the average P/E ratio for the appliance industry sector is 17.0,the value of a share of Whirlpool stock based upon the comparables approach is closest to:

Question

Quizplus · Accepted Answer

To calculate the value of a share of Whirlpool stock using the comparables approach, we need to multiply its expected earnings per share (EPS) by the average price-to-earnings (P/E) ratio of the industry sector.

Using the given information, the expected EPS for Whirlpool is $6.10, and the average P/E ratio for the appliance industry sector is 17.0.

Therefore, the value of a share of Whirlpool stock based on the comparables approach is:

$6.10 x 17.0 = $103.70

So, the closest answer choice is A) $103.70.

You Expect Whirlpool Corporation (WHR)to Have Earnings Per Share of $6.10