Please give me true answer this financial accounting question Estimate the value of a privately-held firm based on the followinginformation:Stock price of a comparable firm = $25.00Net income of a comparable firm = $30,000Number of shares outstanding for the comparable firm = 15,000Earnings per share (EPS) for the target firm = $4.00a) $16.67b) $25.00c) $33.33d) $40.00e) $50.00

To estimate the value of the privately-held firm, we can use the price-to-earnings (P/E) ratio of…

Answered: Estimate the value of a privately-held…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 66P

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The M. Smith and Family Corporation Data Shares Outstanding 25,000,000 Earnings $50,000,000 Dividends, Per Share (Just Paid) $1.25 Return on Equity 0.15 Beta 1.35 Market Data Expected Return Market Return 0.12 Risk-Free Rate 0.03 Required: Using the information in the tables above, complete the necessary steps to calculate the P/E ratio and the PEG ratio. The M. Smith and Family Corporation Calculations Capitalization Rate Earnings Per Share Plowback Rate Sustainable Growth Rate Price P/E Ratio Sustainable Growth Rate (as Percentage, use for PEG Calculation) 0 PEG Ratio
A firm has a total book value of equity of $300,000, a market to book ratio of .33 (one-third), and a book value per share of $8.00. What is the total market value of the firm's equity? O$ 100,000 O$ 37,500 O$ 112,500 O$ 900,000 O $1,200,000
On the basis of this information, calculate as many liquidity, activity, leverage, profitzit and common stock measures as you can. (Note: Assume the current market price of the common stock is $75 per share.
What is the market price of a share of stock for a firm with 100,000 shares outstanding, a book value of equity of P3,000,000, and a market/book ratio of 1.0? a. P8.57 b. P30.00 c. P85.70 d. P105.00
Provide Correct Solution please
Suppose a firm has a book value of owner's equity of $1,200. This is a small firm. If there are 100 shares of stock outstanding, and the firm exhibits a market-to-book ratio of ten, what is the current stock price (Po)? O $75 O $12 O $60 O $120 O $48
To help them estimate the company's cost of capital, Smithco has hired you as a consultant. You have been provided with the following data about the company's stock: D1 $1.45; PO = $25; and g = 6.50% (constant). What is the cost of common from issuing new stock, assuming the flotation cost is 10% of the stock price? = 13.59% 11.10% 12.94% 11.68% 12.30%
Provide answer
The following information is collected from the current annual report of XYZ Ltd: Earning of firm Rs. 9, 00,000 Number of equity shares 1, 50,000 Return on Equity 22.5% Cost of equity 15%What should be the dividend payout ratio so as to keep the share price at Rs. 48 byusing Walter Model? Also, determine the optimum dividend payout ratio and themarket price of share at the optimum dividend payout ratio. What will themaximum and minimum share price under this model?
As the assistant to the CFO of Johnstone Inc., you must estimate its cost of common equity. You have been provided with the following data: D0 = $0.80; P0 = $22.50; and gL = 8.00% (constant). Based on the dividend growth model, what is the cost of common from reinvested earnings? 10.69% 11.25% 11.84% 12.43% 13.05%
Assume that you are a consultant to Broske Inc., and you have been provided with the following data: D1 = $0.67 P0 = $27.50; g = 8.00% (constant). Float on new issues is 5% of market price. What is the cost of issuing common stock?
A firm has common stock with D1 = $3.00; P0 = $30; g = 5%; andF = 4%. If the firm must issue new stock, what is its cost of externalequity, re? (15.42%)

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