(Solved): QUESTION 5 Given that the share price is equal to the product of the Earnings per Share and the Pri ...

QUESTION 5 Given that the share price is equal to the product of the Earnings per Share and the Price-Earnings Ratio or 'Multiple', \( P=E P S \times P E \), where \( P=620 \) and EPS \( =\mathbf{6 2 . 0 0} \) a. Detail the effect that a \( 10 \% \) change in earnings per share (EPS) and a \( 10 \% \) change in the price-earnings multiple (PE) might have on the shareprice \( (\mathrm{P}) \). b. For a long-biased investor which scenario is ideal and why? (10 marks) c. What type of stock does this resemble and why? (5 marks) (5) Assuming a fifteen percent rise in EURUSD over the same timeframe calculate the equivalent return in Euro when there is both an increase in earnings and a multiple expansion.