Question

If eps of company A is 5 and EPS of company B is 10 and if company A is trading at 19 PE what PE should company B Trade at

Answer 1

Answer:

EPS is one among multiple factors in arriving at P/E. The other factors that influence price of the stock are potential growth of the stock, of sector, operating profits, ROE, ROC, macro economic conditions, Brand name, distribution network, lower debt and lower equity etc.

Stock picking can be compared to marriage match selection on various factors such as Job, assets, education, family, character etc not only single factor.