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4. A firm has 35,000 shares of stock outstanding, sales of $767,000, net income of $84,900,...

4.

A firm has 35,000 shares of stock outstanding, sales of $767,000, net income of $84,900, a price-earnings ratio of 16.4, and a book value per share of $9.60. What is the market-to-book ratio?

3.29 times

4.27 times

3.67 times

4.14 times

3.98 times

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Answer #1
Net income (earnings) = $ 84,900.00
Price earning ratio = 16.4
Current market price of stock formula = Earnings * P.E. ratio
84900 * 16.4 =
$ 1392,360.00
Book value per share = 9.6
Total shares = 35000
Total book value formula = book value per share * Total shares
9.6 * 35000
$    336,000.00
Market to book ratio = Market value of share/Book value of shares
1392360 / 336000
4.14
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