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Find that the required return of a stock is less than

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Reference no: EM132995627

Problem 1: The P/E ratio for a firm is 18.7. Expected earnings per share are $1.67. What is the current price of the firm's stock?

a) $31.23
b) $27.60
c) $30.56
d) $28.37

Problem 2: According to the efficient market theory, whenever investors find that the required return of a stock is less than its expected return, they'll buy the stock. This will

a) drive up the price.
b) drive down the price.
c) cause the market to crash.
d) not affect the price

Reference no: EM132995627

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