Question

You notice that​ Coca-Cola has a stock price of $41.13 and EPS of $1.93. Its competitor PepsiCo has EPS of $3.62. ​But, Jones​ Soda, a small batch craft soda producer has a​ P/E ratio of 36.2. Based on this​ information, what is one estimate of the value of a share of PepsiCo​ stock?

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Part 1
One share of PepsiCo stock is valued at ​$enter your response here. ​(Round to the nearest​ cent.)

Answer 1

To estimate the value of a share of PepsiCo stock , we can multiply the EPS of PepsiCo by the P/E ratio of Jones Soda and then get $130.92 .

Step-by-step explanation:

To estimate the value of a share of PepsiCo stock, we can use the price-to-earnings (P/E) ratio of Jones Soda as a reference. The P/E ratio is calculated by dividing the stock price by the earnings per share (EPS). In this case, the P/E ratio of Jones Soda is 36.2. To estimate the value of a share of PepsiCo stock, we can multiply the EPS of PepsiCo by the P/E ratio of Jones Soda.

EPS of PepsiCo: $3.62
P/E ratio of Jones Soda: 36.2

Estimated value of a share of PepsiCo stock: $3.62 x 36.2 = $130.92