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
how many statics numericals in quantitative economics

how starting assignment on this topic

Prepare an interview plan for the post of Business Analyst in your team. a. Welcome then introductions/administrative objectives/agenda. Found rapport. b. Ask questions conc

how the concept of elasticity used for policy formulation

A sample of 58 mutual funds was taken and the mean return in the sample was 14% with a standard deviation of 9.3%. The return on a particular index of stocks (against which the mut

How do economists group countries at various stages of development? There are three major forms of classifications: • IMF: Developing and industrial, transitional economi

It commonly refers to the combination of commercial banking and investment banking. It is a supermarket for both wholesaler n retailer financial services as it offers a huge range

How can trade Liberalisation mean eliminating barriers? Trade liberalisation is the removal of trade restrictions for example tariffs, quotas and non-trade barriers is unsynch

What are the factors of the economic sectors? The factors of the economic sectors: • Primary sector including natural resources as like agriculture, fishing, quarrying minin

Development Strategies are explained as follows: Keeping the reasons for the persistent poverty in the LICs aside, there are three broad progress strategies which have been ado