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

Solutions

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 2 years ago

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