positive
earnings which limited the scope of the relative values. Due tothe small sample size, the average P/E r
atio was skewed high towards Frontier’s outlying performance.
Therefore we determined that the median P/E ratio of comparable companies provided a more accuratefigure. With predicted earnings per share in 2002
of $1.20, JetBlue’s price per share would be $34.12.
Underpricing gives uninformed investors normal return.