Brianne invests using P/E multiples. Currently, the average P/E of major oil corporations is 11.34....
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Brianne invests using P/E multiples. Currently, the average P/E of major oil corporations is 11.34. Brianne is considering investing in AlfaOil (EPS: $0.11) and Yang Energy (EPS: $32.89). Ideally, Brianne wants to put half of her available investment funds ($30,000) in each stock. She believes that AlfaOil should trade at P/E discount of 2 versus industry average, while Yang Energy should trade at a P/E premium of 1.5 versus industry average. If Alfa Oil shares are selling for $1 and Yang Energy shares are selling for $380, how many shares of each company should Brianne buy?
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