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
The Basic assumption which underlay the government of international economy has been that the economies of the world would converge around a capitalist model. The details of such a

Procedure for export under deferred paymet

What is the success effectiveness of multi-national companies (transnationals) in the promotion of development? TNC FDI success into promoting development: • Introduces mode

IMPLEMENTATION ISSUES: Infrastructure sector, especially economic infrastructure, projects are facing a variety of problems, which are to be addressed in order to realise the

The Scenario You have just been appointed as the procurement consultant for a large multinational with operations based in Brisbane. Your superior, the Chief Financial Officer (

Problem 1: (a) Clearly distinguish between the theories of Comparative and Absolute advantage of trade (you are expected to use examples to illustrate your answer). (b) Acco

In what conditions might you (1) increase or (2) decrease the amount of supervision specified to a team member? Where a quality problem has been distinguished in an individual’

explain total productivity

Explain about the characteristics required in a risk owner. To be effective within their role, a risk owner’ requirements are as follows: a. Adequate information regarding a

1) True or False: Elections under the NLRA were intended to replace the need for striking in order to have a union recognized. 2) True or False: Companies can voluntarily acknow