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Examine the data in Figure 1 and indicate whether the firm\'s P/E ratio apperar

ID: 2679711 • Letter: E

Question

Examine the data in Figure 1 and indicate whether the firm's P/E ratio apperar to be appropriate
in light of other firms in the industry.




Comparative Data for Auto Part Replacement Firms

Gilbert Reliance Standard Allied
Annual growth in EPS 12.0% 8.0% 7.0% 9.0%
Return on Stockholder's Equity 18.0% 25.3% 14.0% 15.3%
Return on Total Assets 12.1% 8.1% 10.5% 9.8%
Debt to Total Assets 33.0% 68.0% 25.0% 36.0%
Market Value $35.25 $70.50 $24.25 $46.75
Book Value $16.40 $50.25 $19.50 $50.75
Replacement Value $43.50 $68.75 $26.00 $37.50
Divident Yield 3.40% 2.18% 5.26% 3.12%
P/E ratio 16.80 24.10 14.20 18.10

Explanation / Answer

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