I'm not sure if this is the right place to ask a school related question but any help would be much appreciated! Note that this is not an actual graded assignment but I am studying for an exam with possible similar type problems. I have an answer but I'm not confident with it and I don't have solutions to compare my work.
I am trying to find the value of a certain stock with the given information:
- An annual EPS of $0.50
- Beta of 2.2
- Expected return of 21%
- Average P/E ratio in similar industry of 7.0
So I'm thinking I can find the stock value by simply multiplying the EPS and the P/E ratio: .5 * 7 = $3.5
But I'm pretty sure it isn't that simple with all the other information given in the problem. Could someone help me understand what I'm missing here?
*edit One of the answer choices is insufficient information to find stock value. Would it be possible that I am overlooking this?