Foundations of Finance (9th Edition) (Pearson Series in Finance)
9th Edition
ISBN: 9780134083285
Author: Arthur J. Keown, John D. Martin, J. William Petty
Publisher: PEARSON
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Chapter 4, Problem 4SP
(Price/ book) Chang, Inc.’s
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Greene, Inc.'s balance sheet indicates that the book value of stockholders' equity (book value per
share×total
shares outstanding) is
$750,800.
The firm's earnings per share are
$3.24,
which produces a price-earnings ratio of
12.32.
If there are
49,000
shares of common stock outstanding, what is the firm's market-to-book ratio (i.e., the ratio of price per share to book value per share)? What does the market-to-book ratio tell us?
The balance sheets for Larry underwood motors shows a book value of stockholders equity book value per share x total shares outstanding of $1349000. Furthermore the firms income statement for the year just ended has a net income of $598000, which is $0.285 per share of common stock outstanding. The price earnings ratio for firms similar to underwood motors is 18.71.
A. What price would you expect underwood motors shares to sell for ?
The market price per share is $ round to the nearest cent.
Calculate The Market Price with General Accounting method
Chapter 4 Solutions
Foundations of Finance (9th Edition) (Pearson Series in Finance)
Ch. 4 - Describe the five-question approach to using...Ch. 4 - What are the limitations of industry average...Ch. 4 - What is the difference between a firms gross...Ch. 4 - Prob. 9RQCh. 4 - Prob. 11RQCh. 4 - Prob. 1SPCh. 4 - (Evaluating profitability) The Malia Corporation...Ch. 4 - (Evaluating profitability) Last year, Stevens,...Ch. 4 - (Price/ book) Chang, Inc.s balance sheet shows a...Ch. 4 - Prob. 5SP
Ch. 4 - (Ratio analysis) The balance sheet and income...Ch. 4 - (Analyzing operating return on assets) The D.A....Ch. 4 - (Evaluating liquidity) The Tabor Sales Company had...Ch. 4 - (Evaluating current and proforma profitability)...Ch. 4 - (Financial analysis) The T. P. Jarmon Company...Ch. 4 - (Economic Value Added) K. Johnson, Inc.’s managers...Ch. 4 - Prob. 16SPCh. 4 - Prob. 17SPCh. 4 - Prob. 18SPCh. 4 - Prob. 1MCCh. 4 - Prob. 2MCCh. 4 - Prob. 3MCCh. 4 - Prob. 4MC
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- Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the dividends paid to common stockholders for last year were 2,600,000 and that the market price per share of common stock is 51.50. Required: 1. Compute the dividends per share. 2. Compute the dividend yield. (Note: Round to two decimal places.) 3. Compute the dividend payout ratio. (Note: Round to two decimal places.)arrow_forwardRatio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the balance sheet date, MJOs stock was selling for S25 per share. Required: Assuming MJOs dividend yield is 1%, what are the dividends per common share? Assuming MJOs dividend yield is 1% and its dividend payout is 20%, what is MJOs net income?arrow_forwardRebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Required: 1. Calculate the average common stockholders equity. 2. Calculate the return on stockholders equity.arrow_forward
- The balance sheet for Larry Underwood Motors shows a book value of stockholders’ equity (book value per share × total shares out- standing) of $1,300,000. Furthermore, the firm’s income statement for the year just ended has a net income of $500,000, which is $0.25 per share of common stock outstanding. The price-earnings ratio for firms similar to Underwood Motors is 20. a. What price would you expect Underwood Motors shares to sell for? b. What is the book value per share for Underwood’s shares?arrow_forwardHelp plearrow_forward(Market value analysis) The balance sheet for Larry Underwood Motors shows a book value of stockholders' equity (book value per share x total shares outstanding) of $1,343,000. Furthermore, the firm's income statement for the year just ended has a net income of $530,000, which is $0.265 per share of common stock outstanding The price-earnings ratio for firms similar to Underwood Motors 20.91 a. What price would you expect Underwood Motors shares to sell for? b. What is the book vidue por share for Underwood's sharus? What price would you expect Underwood Motors shares to sell for? The market price per shares S (Round to the nearest cent)arrow_forward
- (Market value analysis) The balance sheet for Larry Underwood Motors shows a book value of stockholders' equity (book value per share x total shares outstanding) of $1,391,000. Furthermore, the firm's income statement for the year just ended has a net income of $505,000, which is $0.232 per share of common stock outstanding. The price-earnings ratio for firms similar to Underwood Motors is 20.54. a. What price would you expect Underwood Motors shares to sell for? b. What is the book value per share for Underwood's shares? a. What price would you expect Underwood Motors shares to sell for? The market price per share is $ (Round to the nearest cent.)arrow_forwardProvide correct answerarrow_forwardThe balance sheet for Larry Underwood Motors shows a book value of stockholders' equity (book value per share\times total shares outstanding) of $1,358,000. Furthermore, the firm's income statement for the year just ended has a net income of $577, 000, which is $ 0.321 per share of common stock outstanding. The price - earnings ratio for firms similar to Underwood Motors is 21.33. a. What price would you expect Underwood Motors shares to sell for? b. What is the book value per share for Underwood's shares?arrow_forward
- (Market value analysis) The balance sheet for Larry Underwood Motors shows a book value of stockholders' equity (book value per share total shares outstanding) of $1,367,000. Furthermore, the firm's income statement for the year just ended has a net income of $513,000, which is $0.276 per share of common stock outstanding. The price-earnings ratio for firms similar to Underwood Motors is 19.86. a. What price would you expect Underwood Motors shares to sell for? b. What is the book value per share for Underwood's shares? a. What price would you expect Underwood Motors shares to sell for? The market price per share is $. (Round to the nearest cent.)arrow_forward(Market value analysis)The balance sheet for Larry Underwood Motors shows a book value of stockholders' equity (book value per sharetimestotal shares outstanding) of $ 1,369,000. Furthermore, the firm's income statement for the year just ended has a net income of $ 505,000, which is $ 0.243 per share of common stock outstanding. The price-earnings ratio for firms similar to Underwood Motors is 18.55. a. What price would you expect Underwood Motors shares to sell for? b. What is the book value per share for Underwood's shares? Question content area bottom Part 1 a.What price would you expect Underwood Motors shares to sell for? The market price per share is $4.51.(Round to the nearest cent.) Part 2 b.What is the book value per share for Underwood's shares? The book value per share is $ ??? enter your response here. (Round to the nearest cent.)arrow_forward(Analyzing market value) The balance sheet for Leo's Discount Tire Company shows a book value of stockholders' equity (book value per share x total shares outstanding) of $23,096,000. Furthermore, the firm's income statement for the year just ended has a net income of $512,000, which is $0.242 per share of common stock outstanding. The price-earnings ratio for firms similar to Leo's Discount Tire Company is 18.39. a. What price would you expect Leo's Discount Tire Company shares to sell for? b. What is the book value per share for Leo's shares? c. What does the market price and book value per share indicate about the firm? a. What price would you expect Leo's Discount Tire Company shares to sell for? The market price per share is $ (Round to the nearest cent.)arrow_forward
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