Question

The company was contemplating a offering price of about 13 times earnings ( P/E ratio =13). In order to check appropriateness of price they randomly chose 7 publicly traded software firms and found that the average price earnings ratio was 11.6and standard deviation was 1.3. At α = 0.02 , can Picosoft conclude that the stocks of publicly traded software firms have an average P/E ratio that is significantly different from 13.

Answer 1

Explanation:

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