Use the tables for the question(s) below.
Estimated 2005 Income Statement and Balance Sheet Data for Ideko Corporation
The following are financial ratios for three comparable companies:

-Based upon the average P/E ratio of the comparable firms,Ideko's target market value of equity is closest to:
A) $157 million
B) $155 million
C) $193 million
D) $165 million
E) $191 million

Question

Use the tables for the question(s) below.
Estimated 2005 Income Statement and Balance Sheet Data for Ideko Corporation
  The following are financial ratios for three comparable companies:
 
-Based upon the average P/E ratio of the comparable firms,Ideko's target market value of equity is closest to:
A) $157 million 
B) $155 million 
C) $193 million 
D) $165 million 
E) $191 million

Quizplus · Accepted Answer

D) Average P/E = 11ea7e5a_6eec_2eea_9a0a_f3405961ae25_TB1623_11 = 23.67
Price = earnings × P/E = 6.939 × 23.67 = $164.22 million

Use the Tables for the Question(s) Below