Explain what are the pros and cons of comparable valuation

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Reference no: EM133530905

Problem

Exercise I: Theoretical question (150 words maximum)

Explain what are the pros and cons of the comparable/multiples valuation of the stocks? What are the most popular multiplicators for stock valuation?

Exercise II: Practical valuation using P/E ratio.

Pick a stock of the publicly traded US-based company of your choice. What is the industry of the company? Use average industry P/E ratio and EPS (earnings per share) of the company to define the "fair" price of the stock.

Reference no: EM133530905

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