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CFA Level 1
Equity Investments

Finding Implied P/E Ratio for Company XYZ

Easy Equity Valuation Techniques Price Multiples

Company XYZ is a technology firm that has a strong growth outlook. Analysts are currently using a price-to-earnings (P/E) multiple to value the company. The current share price is $50, and the earnings per share (EPS) for the last fiscal year was $5. In comparison, the average P/E ratio for the technology industry is 25. What is the implied P/E ratio for Company XYZ based on the given information?

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