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On a particular date, FedEx has a stock price of $89.27 and an EPS of $7.11 . Its competitor, UPS,had an EPS of $0.38 . What would be the expected price of UPS stock on this date, if estimatedusing the method of comparables?A) $4.77B) $7.16C) $9.54D) $10.50

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Answer:

A) $4.77

Explanation:

Here FedEx stock price = $89.27

Fed Ex EPS = $7.11

UPS EPS = $0.38

UPS stock price = ?

By method of comparables,

FedEx Stock Price/FedEx EPS = UPS stock price/UPS EPS

89.27/7.11 = UPS Stock price/0.38

UPS Stock price = 89.27*0.38/7.11 = $4.77

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