Question: You have been asked to assess whether Walgreen Company, a drugstore chain, is correctly priced relative to its competitors in the drugstore industry at the end of 1993.
The following are the price/sales ratios, profit margins, and other relative details of the firms in the drugstore industry.
Based entirely on a subjective analysis, do you think that Walgreen is overpriced because its price/sales ratio is the highest in the industry? If it is not, how would you rationalize its value?