Union Pacific’s reported the following financial information at yearend 2014: Income Statement (in Millions) Other Data...

Union Pacific’s reported the following financial information at yearend 2014:

Income Statement (in Millions) Other Data (in Millions)

Net Sales $6,800 Shares Outstanding 353.00

Less: Operating Expenses $4,550 Stock Dividends $441.25

Earnings Before Taxes $2,250 Shareholder’s Equity $8,825

Less: Taxes $ 785

Net Earnings $1,765 Stock Price=$50.00 per share

From the information provided for Union Pacific (above), what is the price to book value ratio for Union Pacific?

a. 2.0x

b. 2.7x

c. 3.0x

d. 3.4x

e. It cannot be determined from the information provided.

Expert Solution

Book Value = Shareholder’s Equity / Shares

= 8825/353 = 25

Hence price to book value ratio = 50/25 = 2.0x (Option a)

jeff jeffy answered 1 year ago

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