Question 30 about the Implied P/E. I totally understand what the answer states by apllying the FX rate to the associate marke cap (32,330*30%*0.7) and finish calculating the rest of the PE.
However, when I convert the Delicious’s market cap and Net Income to the Associate’s currency, I think the answer does not match. Can someone help explain?
Market Cap (Delicisou) EURO 97,525 (Associate) $32,330
Currenct Exchange Rate (euro per $) 0.7
Average exchange rate (euro per $) 0.73
Income from assciate 354 (euro)
Net income 6501 euro
Answer states: Implied PE = (97525-32330*30%\ *0.7 )/(6501-354)= 14.8
My way of calculating: Implied PE= (97525/ 0.70 -32330*30)/(6501-354)/ 0.73 = 15.38