FINC 330 6981 Business Finance (2242)

EVALUATION OF P/E RATIO

Step 1: Read the articles. These articles contain examples of evaluating P/E ratio. You will be using these examples to answer the questions listed at the bottom of the topic QUESTION.

P/E10 October Update: Is The Stock Market Expensive? by Jennifer Nash, November 1, 2023 https://www.advisorperspectives.com/dshort/updates/2023/11/01/p-e10-october-update-is-the-stock-market-expensive

Will the real P/E ratio please stand up? by Mark Hulbert, October 23, 2023 https://www.morningstar.com/news/marketwatch/20231023131/will-the-real-pe-ratio-please-stand-up

Step 2:

You must use the company assigned for you for the project.

Your assignment:

Please also note that your answers should be written in your own words. Don’t use quotes from the articles. 

1. You are expected to make your own contribution in a main topic as well as respond with value added comments to at least two of your classmates as well as to your instructor.

For this question we will be using P/E ratio.

1. Use Morningstar or Marketwatch, enter the desired stock symbol to get to the company’s front page.  Find P/E ratio is listed on the company’s page or calculate it.

1. Compare the P/E ratio of your company with the industry average or with major competitors. Is there a difference between these numbers? Is the stock overvalued, undervalued, or properly valued? Why?  In accordance with your findings, is it reasonable to buy the stock? Please explain your answers.

2. Reflection the students also should include a paragraph in the initial response in their own words reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace.

In your responses to other students, please look through the postings of your classmates. Compare your conclusion based on your market ratio analysis with the P/E ratio analysis results of other students. Does it change your decision to buy the stock of the company assigned to you for the project?