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Our Space is a social media site that is growing in popularity. The firm has been around for a few years and has created a nice market niche for itself. In fact, it actually turned a profit last year, albeit a fairly small one. After doing some basic research on the company, you've decided to take a closer look. You plan to use the price-to-sales ratio to value the stock, and you have collected P/S multiples on the following social media companies: Find the average P/S ratio for these three firms. Given that Our Space is expected to generate $45 million in sales next year and will have 5 million shares of stock outstanding, use the average P/S ratio you computed above to put a value on Our Space's stock. The average P/S ratio for the 3 firms is (Round to two decimal places.)

Our Space is a social media site that is growing in popularity. The firm has been around for a few years and has created a nice market niche for itself. In fact, it actually turned a profit last year, albeit a fairly small one. After doing some basic research on the company, you've decided to take a closer look. You plan to use the price-to-sales ratio to value the stock, and you have collected P/S multiples on the following social media companies: Find the average P/S ratio for these three firms. Given that Our Space is expected to generate $45 million in sales next year and will have 5 million shares of stock outstanding, use the average P/S ratio you computed above to put a value on Our Space's stock. The average P/S ratio for the 3 firms is (Round to two decimal places.)

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter9: Stocks And Their Valuation
Section: Chapter Questions
Problem 1TCL
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Our Space is a social media site that is growing in popularity. The firm has been around for a few years and has created a nice market niche for itself. In fact, it actually turned a profit last year, albeit a fairly small one. After doing some basic research on the company, you've decided to take a closer look. You plan to use the price-to-sales ratio to value the stock, and you have collected P/S multiples on the following social media companies: Find the average P/S ratio for these three firms. Given that Our Space is expected to generate $45 million in sales next year and will have 5 million shares of stock outstanding, use the average P/S ratio you computed above to put a value on Our Space's stock. The average P/S ratio for the 3 firms is (Round to two decimal places.)
Transcribed Image Text:Our Space is a social media site that is growing in popularity. The firm has been around for a few years and has created a nice market niche for itself. In fact, it actually turned a profit last year, albeit a fairly small one. After doing some basic research on the company, you've decided to take a closer look. You plan to use the price-to-sales ratio to value the stock, and you have collected P/S multiples on the following social media companies: Find the average P/S ratio for these three firms. Given that Our Space is expected to generate $45 million in sales next year and will have 5 million shares of stock outstanding, use the average P/S ratio you computed above to put a value on Our Space's stock. The average P/S ratio for the 3 firms is (Round to two decimal places.)
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