Suppose CP Rail Has a Current Share Price of $194

question 112

Multiple Choice

Suppose CP Rail has a current share price of $194.83 and an EPS of 9.01.Its competitor,CN Rail,has an EPS of 4.27.Using the method of comparables,what is the expected price of CN Rail stock?

• A)$411.10
• B)$45.63
• C)$21.62
• D)$92.33
• E)$102.86

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Definitions:

Concession Revenue

Income earned from granting the rights to operate and sell specific products or services within a venue or to a particular market.

Binding Price Floor

A minimum price set by the government above the equilibrium price, causing a surplus by preventing the market price from falling to its equilibrium level.

Excess Supply

A situation where the quantity of a good or service supplied is greater than the quantity demanded at a given price.

Equilibrium

A state where supply equals demand, allowing the market for a good or service to stabilize at a certain price and quantity.