Calculate the company price and earnings ratio

Assignment Help Financial Management

Reference no: EM131624477

You have assessed the following information for Kid’s Apparel Ltd. based on your expectations of the company over the next financial year:

Operating profit (before-tax) $13.8 million

Taxable income $10 million

Company tax rate 30%

Authorised share capital 10 million

Issued share capital 7.5 million

Current share price $21.60

Based on the information provided, calculate the company’s price/earnings (P/E) ratio and comment on the company’s growth prospects given that the industry average P/E ratio is 12 times. (please provide workings)

Reference no: EM131624477

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