A firm has a price earnings ratio of 27, net income of 157,000 a book value...

A firm has a price earnings ratio of 27, net income of 157,000 a book value per share of 31.8 and 90,000 shares outstanding. Whats the market to book ratio?

1.89

1.63

1.48

1.57

1.71

Expert Solution

	Given :
a	Net Income =	157,000
b	No of shares outstanding	90,000
c	EPS =a/b=	1.744
d	P/E Ratio =Price per share/EPS=	27
e	Market Price per share =27*EPS=	47.10
f	Book Value per share	31.80
g	Market to Book Ratio=e/f=	1.48

	So correct Answer is 1.48.

jeff jeffy answered 3 years ago

Suppose a firm has a retention ratio of 27 percent and net income of $4.2 million....

Suppose a firm has a retention ratio of 27 percent and net income of $4.2 million. How much does it pay out in dividends? (Enter your answer in dollars not in millions.)

Suppose that a firm has a price-earnings ratio which is higher than a value deemed to...

Suppose that a firm has a price-earnings ratio which is higher than a value deemed to be normal. Investors tend to infer from this information that a. the firm's bonds will increase in their ratings. b. the firm's bonds will decrease in their ratings. c. the firm's stock is over-valued and one should consider selling the stock. d. the firm's stock is under-valued and one should consider buying the stock. e. the firm will be paying increased dividends. For an...

A firm has a (net income/taxable income) ratio of 0.8, aleverage ratio of 1.5, a...

A firm has a (net income/taxable income) ratio of 0.8, a leverage ratio of 1.5, a (taxable income/EBIT) of 0.4, an asset turnover ratio of 2, and a return on sales ratio of 10%. What is the firm's ROE?

1)If the equity subtracted from the net income is 7,179. what is the price earnings ratio....

1)If the equity subtracted from the net income is 7,179. what is the price earnings ratio. 2) How to calculate balance sheet equation in percentage terms 3) How to find the % of change in sales,net income and market capitalization

2. The income statement reveals net earnings (net income) of a firm for a period of...

2. The income statement reveals net earnings (net income) of a firm for a period of time. Explain how “net earnings (net income) of a firm for a period of time” is different from each of the following descriptions: ? resources and equities of a firm at a point in time Usually record ? resources and equities of a firm for a period of time ? net earnings (net income) of a firm at a point in time

1. The price-earnings ratio P/E is the ratio (market value of one share)/(earnings per share). If...

1. The price-earnings ratio P/E is the ratio (market value of one share)/(earnings per share). If P/E increases by 19% and the earnings per share decrease by 9%, determine the percentage change in the market value. Round your answer to the nearest percentage point. - 2. To produce each product unit, the company spends $1.75 on material and $2.95 on labor. Its total fixed cost is $9000. Each unit sells for $6.15. What is the smallest number of units that...

We have examined several methods to value a firm including DCF, residual income, price to book...

We have examined several methods to value a firm including DCF, residual income, price to book as a proxy for firm value, and price to earnings as a proxy for firm value. Please explain the key components of these four methods and any critical underlying assumptions that we discussed in class or that have been brought to your attention as you completed your annual report project.

A firm has a current book value per share of $21.10 and a market price per...

A firm has a current book value per share of $21.10 and a market price per share of $37.57. Next year's earnings are expected to be $5.60 per share and the expected earnings growth rate is 2.5 percent. What is the required rate of return on this stock? A. 14 percent B. 15 percent C. 16 percent D. 17 percent E. 18 percent

One measure of the value of a stock is its price to earnings ratio (or P/E...

One measure of the value of a stock is its price to earnings ratio (or P/E ratio). It is the ratio of the price of a stock per share to the earnings per share and can be thought of as the price an investor is willing to pay for $1 of earnings in a company. A stock analyst wants to know whether the P/E ratios for three industry categories differ significantly. The following data represent simple random samples of companies...

Compared to growth stocks, value stocks' price-earnings ratio is typically: There is no relationship between the...

Compared to growth stocks, value stocks' price-earnings ratio is typically: There is no relationship between the price-earnings ratios of growth and value stocks. The same. Higher. Lower.

Question