Give me correct option Cold Goose Metal Works Inc. just reported earnings after tax (also called netincome) of $9,750,000, and a current stock price of $34.00 per share. Thecompany is forecasting an increase of 25% for its after-tax income next year,but it also expects it will have to issue 2,900,000 new shares of stock (raisingits shares outstanding from 5,500,000 to 8,400,000).a. If Cold Goose's forecast turns out to be correct and its price-to-earnings(P/E) ratio does not change, what does the company's management expect itsstock price to be one year from now (Round any P/E ratio calculation to fourdecimal places).A. $27.85 per shareB. $34.00 per shareC. $20.89 per shareD. $34.81 per shareb. One year later, Cold Goose's shares are trading at $48.36 per share, and thecompany reports the value of its total common equity as $46,788,000.Given this information, Cold Goose's market-to-book (M/B) ratio is

Explanation: For part (a); The company's forecasted increase in net income by 25% leads to a new net…

Answered: Cold Goose Metal Works Inc. just…

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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Cute Camel Woodcraft Company just reported earnings after tax (also called net income) of $9,250,000 and a current stock price of $39.50 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 3,000,000 new shares of stock (raising its shares outstanding from 5,500,000 to 8,500,000). If Cute Camel's forecast turns out to be correct and its price/earnings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places.) O $31.98 per share O $39.50 per share O $23.99 per share O $39.98 per share
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