Get correct solution with explanation for this financial accounting question Cloud Stream Tech is a new softwarecompany with negative earnings. Thecompany's annual sales are $3.6 millionand there are 200,000 shares outstanding.If the benchmark price-sales ratio is 3.5,what is your estimate of an appropriatestock price?

Step 1: Definition of Price-Sales Ratio and Stock PriceThe price-sales ratio (P/S ratio) relates the…

Answered: Cloud Stream Tech is a new software…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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•Suppose we are trying to value the company Inactivision, a video game developer that does not pay dividends and has negative earnings but it growing. If the appropriate industry price to sales ratio for this type of company is 20 and you predict sales to be $3 per share for the coming year, then the forecasted stock price for a year from now, or target price, is the following: Respuesta:
What is your estimate of an appropriate stock price for this financial accounting question?
Can you show me how to get these answers please.
At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.46, and the risk-free rate was about 3.53%. AppleApple's price was $83.2483.24. AppleApple's price at the end of 2007 was $196.46. If you estimate the market risk premium to have been 6.79%, did Apple's managers exceed their investors' required return as given by the CAPM? The expected return is The realized return is Did Apple's managers exceed their investors' required return as given by the CAPM?
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Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and dividends have been growing at a rate of 38.5%, and the current dividend yield is 10.50%. Its beta is 1.37, the market risk premium is 16.50%, and the risk-free rate is 2.30%. a. Use the CAPM to estimate the firm's cost of equity. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Cost of equity % b. Now use the constant growth model to estimate the cost of equity. (Do not round intermediate calculations. Enter your answer as a whole percent.) Cost of equity % c. Which of the two estimates is more reasonable?

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Cloud Stream Tech is a new software company with negative earnings. The company's annual sales are $3.6 million and there are 200,000 shares outstanding. If the benchmark price-sales ratio is 3.5, what is your estimate of an appropriate stock price?