price would you expect U

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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 The balance sheet for Larry Underwood Motors shows a book value of​ stockholders' equity​ (book value per
share×total
shares​ outstanding) of
$1,332,000.
​ Furthermore, the​ firm's income statement for the year just ended has a net income of
$523,000​,
which is
$0.251
per share of common stock outstanding. The​ price-earnings ratio for firms similar to Underwood Motors is
21.18.
 
a.  What price would you expect Underwood Motors shares to sell​ for?
b.  What is the book value per share for​ Underwood's shares?
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