Calculate the price - earnings ratio, Business Economics

Yanni works for Woolworths Limited (WOW) and owns 5,000 Woolworths shares that he received in lieu of a bonus five years ago. Woolworths has reported an NPAT of $1.294 billion and currently has 1.207 billion shares on issue. Its current market price is $26.50.

a)  Calculate the price/earnings ratio for Woolworths based on its reported NPAT and current market price (to one decimal place).

b)  Yanni has received investment research from an equities broker that forecasts WOW's EPS for the coming financial year to be $1.485 per share. The current industry average P/E ratio is 14.05x. Calculate WOW's fair price based on the earnings forecast.

c)  Discuss whether, based on your calculations, WOW currently warrants a 'buy', 'hold' or 'sell' recommendation. Identify and explain other general and company-specific factors that may be relevant to making an investment decision about this stock. You must discuss some performance drivers that are specific to Woolworths.

Posted Date: 2/23/2013 3:10:25 AM | Location : United States







Related Discussions:- Calculate the price - earnings ratio, Assignment Help, Ask Question on Calculate the price - earnings ratio, Get Answer, Expert's Help, Calculate the price - earnings ratio Discussions

Write discussion on Calculate the price - earnings ratio
Your posts are moderated
Related Questions
Suppose you are the only market analyst in your company's management team. Your company belongs to the energy industry. It is an oil and gas company engaged in the exploration, d

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2

What is Unbalanced Growth theory? Unbalanced growth shares analysis along with balanced growth theorists which free markets cannot produce development. Planning of government

How does social capital influence development? Problem: Low social capital leads to potential conflicts and high transaction costs which hinder growth. Several LDCs (Less Deve

What are the difficulties of Developing Economies? Problems of Developing Economies: • Internal and external difficulties limit LDCs opportunity for development. • Les

What is structural change? Structural change: Structural change arises while the associate share of GDP and employment accounted for through the primary, secondary and te

Ask quethe monthly revenue of a certain comany is given by R=820p-7^2p,where p is the price in dollars of the product the company manufacturers. at what price will the revenue be $

What do you believe are the consequences of a rating downgrade?

The factors that affect the volume of production in economics

The Concept of Equity is explained below: Equity represents that the principle of taxation which emphasizes fairness or just the sacrifice, which is everyone must pay the tax d