What is your estimate of an appropriate stock price TrendSphere Inc. is a new company and currently hasnegative earnings. The company's sales are $1.2 million, andthere are 125,000 shares outstanding. If the benchmarkprice-sales ratio is 2.8, what is your estimate of anappropriate stock price?

To estimate the appropriate stock price using the price-sales (P/S) ratio, we use the formula: Stock…

Answered: TrendSphere Inc. is a new company and…

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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TrendSphere Inc. is a new company and currently has negative earnings. The company's sales are $1.2 million, and there are 125,000 shares outstanding. If the benchmark price-sales ratio is 2.8, what is your estimate of an appropriate stock price?