What is your estimate of an appropriate stock price for this financial accounting question? TwitterMe Inc. is a new company and currently hasnegative earnings. The company's sales are $1 millionand there are 110,000 shares outstanding. If thebenchmark price-sales ratio is 3, what is your estimateof an appropriate stock price?

Step 1: Define Price-Sales RatioPrice-sales ratio is the ratio of a stock's price per share to its…

Answered: TwitterMe 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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TwitterMe Inc. is a new company and currently has negative earnings. The company's sales are $1 million and there are 110,000 shares outstanding. If the benchmark price-sales ratio is 3, what is your estimate of an appropriate stock price?