TwitterMe, Inc., is a new company and currently has negative earnings. The company's sales are $1.3 million and there are 116,000 shares outstanding. a. If the benchmark price-sales ratio is 3.6, what is your estimate of an appropriate stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What if the price-sales ratio were 3.0? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
TwitterMe, Inc., is a new company and currently has negative earnings. The company's sales are $1.3 million and there are 116,000 shares outstanding. a. If the benchmark price-sales ratio is 3.6, what is your estimate of an appropriate stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What if the price-sales ratio were 3.0? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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
Problem 1PS
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![TwitterMe, Inc., is a new company and currently has negative earnings. The company's
sales are $1.3 million and there are 116,000 shares outstanding.
a. If the benchmark price-sales ratio is 3.6, what is your estimate of an appropriate
stock price? (Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)
b. What if the price-sales ratio were 3.0? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
a. Stock price at a price-sales of 3.6
b. Stock price at a price-sales of 3.0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fef8e7aeb-1df6-4e89-aa2c-22034ae8f630%2F2908146f-7a6f-47f2-90e7-a1232d23c06c%2Fd10xcfk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:TwitterMe, Inc., is a new company and currently has negative earnings. The company's
sales are $1.3 million and there are 116,000 shares outstanding.
a. If the benchmark price-sales ratio is 3.6, what is your estimate of an appropriate
stock price? (Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)
b. What if the price-sales ratio were 3.0? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
a. Stock price at a price-sales of 3.6
b. Stock price at a price-sales of 3.0
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