Re: [ vuZs.net ] FIN630 GDB#2 Complete 100% Solution By SAQIB SAMIN

salam bahi jaan. bahi jaan plz guide kary is GDP ma bs Answer mantion
karny ha. ya onka pora salution formula laga k value find kar k phir
mention karna ha apna ans.

On 5/31/11, muhammad saqib khan <saqib.samin@gmail.com> wrote:
> *GDB#2 Fin630 Complete Solution by SAQIB SAMIN
> *
>
>
>
> Your answer should be in such format:*
> *
>
> *1.** **PE ratio for Company A =14.2857*
>
>
>
> *2.** **PE ratio for Company B =9.375*
>
> *3.** **According to Morningstar classification which Company's stock is
> value stock = Company B*
>
> *4.** **According to Morningstar classification which Company's stock is
> growth stock =Company A*
>
>
>
>
>
> *Solution Details:*
>
> Company A has net income of Rs.560 million; company has 40 million
> outstanding shares which are currently trading at Rs.200 per share.
>
> Company B has net income of Rs.480 million; company has 30 million
> outstanding shares which are currently trading at Rs.150 per share.
>
> 1) *What is PE ratio for Company A?*
>
> PE = market price per share / earning per share
>
> Earning per share, EPS = *net income – dividends on preferred stock*
>
> Average outstanding shares
>
> =560 / 40
>
> = 14
>
> PE = 200 / 14 = *14.2857*
>
> *2) **What is PE ratio for Company B?*
>
> PE = market price per share / earning per share
>
> Earning per share, EPS = *net income – dividends on preferred stock*
>
> Average outstanding shares
>
> = 480 / 30
>
> = 16
>
> PE = 150 / 16
>
> = *9.375*
>
> *3) **According to Morningstar classification (based on Magic number)
> which Company's stock is value stock?*
>
> *4) According to Morningstar classification (based on Magic number) which
> Company's stock is Growth stock?*
>
> *Company A has Relative PE ratio of 1.1 times and Relative Price to Book
> ratio of 1.25 times.*
>
> If Magic number is > 2.25 then Stock is Growth Stock
>
> If magic Number < 1.75 then Stock is value stock
>
> Magic Number = Relative PE + Relative Price to Book ratio
>
> = 1.1 + 1.25
>
> *= 2.35 *
>
> *Magic number > 2.25 so Company A is Growth Stock*
>
> *Company B has Relative PE ratio of 1 times and Relative Price to Book ratio
> of 0.50 times.*
>
> Magic Number = Relative PE + Relative Price to Book ratio
>
> = 1 + 0.50
>
> *= 1.50 *
>
> *Magic number < 1.75 so Company B is Value Stock*
>
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