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 can the size of shadow economy estimated? The size of the shadow economy is estimated when activity is undeclared as the amount of informal activity can be calculated: a

What would primary markets look like in absence of secondary markets?

What are the formal and informal sectors? Formal and informal sectors: Economic activities considered as to the government make up the formal sector of the economy. That

Define the difference between effort and elapsed time. What is the importance of this difference for project planning purposes? Effort is the whole volume of work included in a

Explain about the term Traditional Economy. Traditional economy: It is where decisions regarding what, how and for whom to produce are based onto tradition and custom. A


Do you agree with what Dick Brandon said regarding sex? Do not take this question too seriously! Even though the quotation had a humorous intention, this does highlight a serio


1) Between mid 2008 and mid 2009 measured RGDP in the economy fell by 3.8% as the US economy sank into a recession. Over that same time period total employment in terms of hours wo

What is the social capital? Social Capital: Social capital is related with Putnam: Social capital considers to as features of social life as networks, norms and trust whi