Respuesta :
Answer:
The estimated Value of Share of PepsiCo stock will be $20 x $4.15 = $83.
Explanation:
Going by its Peer Average
Coca-Cola P/E ratio = $40.64 divided by $1.99 = $20.42
The Seattle based Soda producer had $33.3, this is very likely as it would incur less Marketing Costs among other Costs compared to Pepsico and Coca-Cola
Very likely Pepsico will be about $20 on average considering the size of its business and costs of doing Business just like its Peer Coca-Cola.
Therefore the estimated Value of Share of PepsiCo stock will be $20 x $4.15 = $83.
Answer:
PepsiCo's Share Price=$84.74
Explanation:
For Coca-Cola that is comparable to PepsiCo,we can begin the analysis by calculating Coca-Cola P/E ratio can be computed thus"
Coca-Cola P/E's ratio=Stock price/Earnings per share
stock price=$40.64
EPS=$1.99
Coca-Cola's P/E ratio=$40.64/$1.99
Coca-Cola's P/E ratio=$20.42
Using the Coca-Cola's P/E ratio as a proxy for Pepsi-Co the estimate of the value of a share of PepsiCo is calculated as follows:
Coca-Cola P/E's ratio=PepsiCo's Share Price/ PepsiCo's Earnings per share
PepsiCo's EPS=$4.15
$20.42=PepsiCo's Share Price/$4.15
PepsiCo's Share Price=$20.42*$4.15
PepsiCo's Share Price=$84.74
Jones Soda's P/E ratio cannot be used as a proxy for PepsiCo as PepsiCo is bigger in size than Jones Soda.
