a) In assessing the fair value of a company’s share, analysts often examine a range of financial metrics, including: • Price to earnings’ ratio • Dividend yield • Book to market ratio Explain these concepts and what a high value would indicate in terms of ‘expensiveness’ of a stock for each of these measures. b) As of 29th October 2021 the share price of the car maker and technology company Tesla reached a (then) high of $1114 per share which implied a PE ratio of 363.8 (TTM),a dividend yield of zero ,an Earnings per Share (EPS) of $3.06 and a beta of 1.89. Please explain these terms and how they relate to each other (if at all). If the wider market S&P index had a PE of 21 at this time, what can we say regarding the ‘value’ of Tesla as a possible investment?
