The stocks of firms A and B are extremely similar. Specifically, these stocks have the...
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Accounting
The stocks of firms A and B are extremely similar. Specifically, these stocks have the same required rate of return and are expected to have the same dividend growth rates. Firm A is expected to generate earnings of $2.18 per share in the next year. Firm B is expected to generate earnings of $0.62 per share in the next year. The price to earnings ratio for the stock of Firm A is 15.30. What should the price of stock B be? Round all intermediate calculations to 6 decimal points. Your final answer should be within $0.05 of the correct answer choice. $24.68$33.35$9.49$20.68
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