What is the estimate value of danzels stock using this information? Danzel Home Goods operates in thehousehold goods industry, where stockstypically have an average P/E ratio of 9.2.Danzel recently reported a net income of$58,000 and has 62,000 shares of commonstock outstanding.What is the estimated value of Danzel's stockusing this information?

To estimate the value of Danzel Home Goods' stock, we use the Price-to-Earnings (P/E) ratio, which…

Answered: Danzel Home Goods operates in the…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 2MAD

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Solve this financial accounting problem
You have been assigned to value the stock of XYZ a small illiquid company. Their recent income statement shows that earnings were $30,589,307 and they have 9,719,532 shares outstanding. You have found a very similar firm with publicly traded stock, ABC, which recently reported EPS of $2.358 and its stock is currently selling for $39.31. Use the P/E ratio of ABC to establish a reasonable price for the target firm XYZ. O $50.16 O $52.47 O $57.02 O $39.31 $5.30
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(Market valur ratios) Garret Industries has a price/earnings ratio of 16.29X. a) If Garret's earnings per share are $1.35, what is the price per share of Garret,s stock? b) Using the price per share you found in part (a), determine the price/book ratio if Garret,s equity book value per share is $9.58.
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Lei Materials' balance sheet lists total assets of $1.05 billion, $127 million in current liabilities, $435 million in long-term debt, $488 million in common equity, and 54 million shares of common stock. If Lei's current stock price is $51.38, what is the firm's market-to-book ratio?
(Market value analysis) Lei Materials' balance sheet lists total assets of $1.36 billion, $108 million in current liabilities, $488 million in long-term debt, $764 million in common equity, and 50 million shares of common stock. If Lei's current stock price is $51.69, what is the firm's market-to-book ratio? The market-to-book ratio is (Round to two decimal places)
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TNT Corporation's stock is currently selling at $36 per share. TNT reported total revenues of $5.26 billion over the past year, has a book value of equity of $2.9 billion, and has 296 million shares outstanding. Based on comparable firms, the appropriate P/S and P/B for TNT are 2.85 and 4.75, respectively. A. What is the stock's approximate intrinsic value based on the P/S multiplier? B. What is the stock's approximate intrinsic value based on the P/B multiplier?
In early 2018, Abercrombie & Fitch (ANF) had a book equity of $1,256 million, a price per share of $22.89, and 68.5 million shares outstanding. At the same time, The Gap (GPS) had a book equity of $3,130 million, a share price of $31.83, and 384 million shares outstanding. a. What is the market-to-book ratio of each of these clothing retailers? b. What conclusions do you draw from comparing the two ratios? a. What is the market-to-book ratio of each of these clothing retailers? ANF's market-to-book ratio is (Round to two decimal places.) GPS's market-to-book ratio is . (Round to two decimal places.) b. What conclusions do you draw from comparing the two ratios? In a relative sense, the outlook of Abercrombie & Fitch more favorably than The Gap. For every dollar of equity invested in ANF the market values that dollar today at $1.25 vs. $3.91 for a dollar invested in the GPS. Equity investors are willing to pay relatively more today for shares of ANF than for GPS because they expect ANF…

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Danzel Home Goods operates in the household goods industry, where stocks typically have an average P/E ratio of 9.2. Danzel recently reported a net income of $58,000 and has 62,000 shares of common stock outstanding. What is the estimated value of Danzel's stock using this information?