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Big Joe's Burgers Has a P/E Ratio of 12 and a Beta

Question 31

Multiple Choice

Big Joe's Burgers has a P/E ratio of 12 and a beta equal to 3.The risk-free rate is 8 percent and the return to the market has been 14 percent.The firm has an EPS of $5.00.What should be the current market price of Big Joe's stock?


A) $120.00
B) $96.00
C) $44.40
D) $60.00
E) $55.20

Correct Answer:

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