Respuesta :
The price is $20.
Stock valuation is a technique for determining hypothetical values for businesses and their stocks.
What is meant by stock Valuation?
Stock valuation is a technique for determining hypothetical values for businesses and their stocks. In order to profit from price movement, these methods are primarily used to forecast future market prices, or more generally, potential market prices.
Stocks that are deemed to be undervalued (in relation to their theoretical value) are bought, while stocks that are deemed to be overvalued are sold, with the expectation that undervalued stocks will generally increase in value while overvalued stocks will generally decrease in value.
The price-to-earnings (P/E) ratio of the corporation is the most used method of stock valuation. The P/E ratio is calculated by dividing the stock price by the most recent reported earnings per share for the company (EPS). A low P/E ratio suggests that a company is offering an appealing amount of value to the person purchasing it.
[tex]P_{0} =.50/(.1/4)=[/tex] $20.
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