The Johnson Manufacturing Corporation has the following financial information: ⚫ Total assets: $625,000 . Current liabilities: $85,000 ⚫ Long-term liabilities: $140,000 ⚫ Preferred stock outstanding: $50,000 ⚫ Common stock shares outstanding: 25,000 shares • ⚫ Earnings available to common stockholders: $45,000 ⚫ P/E ratio: 14 Required: a. Calculate the book value per share b. Determine the current market price of the stock c. Calculate the ratio of market value per share to book value per share

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 79E: Ratio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the...
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general accounting

The Johnson Manufacturing Corporation has the following financial
information:
⚫ Total assets: $625,000
.
Current liabilities: $85,000
⚫ Long-term liabilities: $140,000
⚫ Preferred stock outstanding: $50,000
⚫ Common stock shares outstanding: 25,000 shares
•
⚫ Earnings available to common stockholders: $45,000
⚫ P/E ratio: 14
Required: a. Calculate the book value per share b. Determine the current
market price of the stock c. Calculate the ratio of market value per share to
book value per share
Transcribed Image Text:The Johnson Manufacturing Corporation has the following financial information: ⚫ Total assets: $625,000 . Current liabilities: $85,000 ⚫ Long-term liabilities: $140,000 ⚫ Preferred stock outstanding: $50,000 ⚫ Common stock shares outstanding: 25,000 shares • ⚫ Earnings available to common stockholders: $45,000 ⚫ P/E ratio: 14 Required: a. Calculate the book value per share b. Determine the current market price of the stock c. Calculate the ratio of market value per share to book value per share
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