Question

TwitterMe, Inc., is a new company and currently has negative earnings. The company’s sales are $1,600,000 and there are 140,000 shares outstanding.

If the benchmark price–sales ratio for the company is 5.6, how much
will you pay for the stock? **(Do not round intermediate calculations and
round your answer to 2 decimal places, e.g.,
32.16.)**

Current stock price
$

If the benchmark price–sales ratio for the company is 5, how much
will you pay for the stock? **(Do not round intermediate calculations and
round your answer to 2 decimal places, e.g.,
32.16.)**

Current stock price
$

Answer #1

Sales = $1,600,000

Number of shares outstanding = 140,000

Sales per share = Sales / Number of shares outstanding

Sales per share = $1,600,000 / 140,000

Sales per share = $11.4286

Answer a.

Sales per share = $11.4286

Price-sales Ratio = 5.60

Current Stock Price = Sales per share * Price-sales Ratio

Current Stock Price = $11.4286 * 5.60

Current Stock Price = $64.00

Answer b.

Sales per share = $11.4286

Price-sales Ratio = 5.00

Current Stock Price = Sales per share * Price-sales Ratio

Current Stock Price = $11.4286 * 5.00

Current Stock Price = $57.14

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year, the company had net income of $6,400,000, total equity of
$21,610,000, sales of $39,300,000, and 4.4 million shares of stock
outstanding.
What are earnings per share (EPS)? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
Earnings per share [] $
What is the price?earnings ratio? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)...

Ames,
Inc., has a current stock price of $43.00. For the past year, the
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outstanding.
What are
earnings per share (EPS)?
(Do not round intermediate calculations and round your
answer to 2 decimal places, e.g.,
32.16.)
Earnings
per share
$
What is
the price?earnings ratio?
(Do not round intermediate calculations and round your
answer to 2 decimal places, e.g.,
32.16.)
Price?earnings...

The Blooming Flower Co. has earnings of $2.10 per share. The
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What stock price would you consider appropriate? (Do not
round intermediate calculations. Round your answer to 2 decimal
places, e.g., 32.16.)
Stock price
$
What if the benchmark PE were 13? (Do not round
intermediate calculations. Round your answer to 2 decimal places,
e.g., 32.16.)
Stock price
$

Problem 3-6 Calculating Market Value Ratios [LO2]
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outstanding.
What are earnings per share? (Do not round intermediate
calculations and round your final answer to 2 decimal places, e.g.,
32.16.)
Earnings
$ per share
What are dividends per share?...

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outstanding.
What are earnings per share? (Do not round intermediate
calculations and round your final answer to 2 decimal places, e.g.,
32.16.)
Earnings
$ per share
What are dividends per share?
(Do not round intermediate calculations
and round...

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dividends, and it has ending total equity of $4.99 million. The
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outstanding.
a.
What are earnings per share? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g.,
32.16.)
b. What are dividends per share? (Do not round intermediate
calculations and round your answer to 2...

Makers Corp. had additions to retained earnings for the year
just ended of $261,000. The firm paid out $194,000 in cash
dividends, and it has ending total equity of $4.99 million. The
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outstanding.
a.
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calculations and round your answer to 2 decimal places, e.g.,
32.16.)
b. What are dividends per share? (Do not round intermediate
calculations and round your answer to 2...

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