Using the method of comparables

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Reference no: EM131012189

Use all of the above data to estimate the value of Macy’s shares. One problem above is the negative EPS (i.e. loss) by JC Penney. What should you do if you have negative earnings for a comparable firm? If you do not include JC Penney in the P/E calculations (but use it in the other multiples), using the “Method of Comparables”, what would you find as the value of Macy’s shares? Would you invest in Macy’s shares? I think if you have a negative earring you would drop it and put zero in the place of the negative.

Reference no: EM131012189

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